/raid1/www/Hosts/bankrupt/TCR_Public/040618.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, June 18, 2004, Vol. 8, No. 122
Headlines
ACE ELECTRICAL: Wants Until Plan Confirmation to Decide on Leases
ADELPHIA COMMS: Lenders Agree to Amend $8.8BB Exit Financing Terms
ADEPT TECHNOLOGY: Names Robert Strickland as VP Finance and CFO
ADESA INC: Commences Initial Public Offering of 6.25MM Shares
ADVANCED MEDICAL: S&P Affirms Low-B Corporate & Bank Loan Ratings
AIR CANADA: May Abandon Attempts to Raise CN$250MM Capital
AIR CANADA: Monitor Ernst & Young Provides Twenty-Seventh Report
AMERICAN NATURAL: Files Rights Offering Registration Statement
APPLIED EXTRUSION: Lowers Earnings Expectations & Retains Advisors
ARMSTRONG: Asks Court To Extend Deadline To Remove Litigation
ARROW AIR: Appoints Globe Air Cargo as General Sales Agent
BEVERLY ENTERPRISES: Fitch Rates Planned $225MM Sub. Notes at B+
BNS CO: Completes U.K. Asset Sale for GB5.5 Million
BUSH INDUSTRIES: Gets Court OK to Hire Hodgson Russ as Attorneys
CAREMARK: Will Present at Wachovia Securities' June 23 Conference
CARMA FINANCIAL: Appoints David Aiello as Chief Executive Officer
CARMA FINANCIAL: Acquires Legal Credit Recovery Corporation
CENTRAL COLUMBIANA: Case Summary & 20 Largest Unsecured Creditors
CELESTICA INC: Completes Sale of 7.875% Senior Subordinated Notes
CHAMBERS STREET: S&P Assigns Low-B Ratings to Classes C & D
COINMACH CORP: S&P Cuts Corporate & Senior Debt Ratings to B+
CONSOLIDATED FREIGHTWAYS: Seattle Asset Sale Moved to June 22
CONSOLIDATED FREIGHTWAYS: Selling Grand Forks Facility June 22
CONSOLIDATED FREIGHTWAYS: Milwaukee & Marinette Assets Up for Sale
COVANTA TAMPA: Asks Court to Disallow A&A Coastal's $845K+ Claims
CREDIT SUISSE: Fitch Takes Ser. 1995-M1 Ratings Off Negative Watch
CRESCENT OPERATING: Plan Confirmation Hearing Set for Monday
DAN RIVER: U.S. Trustee Amends Official Creditors' Committee
DAN RIVER: Creditors Must File Claims by August 10, 2004
DAS INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors
DB COMPANIES: First Creditors' Meeting Slated for July 12
DECORAH LLC: Voluntary Chapter 11 Case Summary
DEEP WELL: BMA Securities Files OTC BB Stock Listing Application
DEVINE ENTERTAINMENT: Posts CDN$2.3 Million Deficit at March 31
DEX MEDIA: Fitch Affirms Subsidiaries' Low-B Senior Debt Ratings
EL PASO CORP: Banks Give Until August 15 to File Financial Reports
ENDURANCE SPECIALTY: S&P Rates Preferred Stock at BB+
ENRON CORPORATION: Court Approves Eleven Settlement Agreements
ENRON CORP: Inks Stipulation Resolving Disputes with AEP Parties
ENRON: Panel Sues 7 Workers to Recover $8.6M Preferential Payments
ETHYL CORP: Plans to Close Holding Company Transaction Today
FEDERAL-MOGUL: Wants To Extend Removal Period Through October 1
FIBERMARK: Secures Lease Decision Deadline through September 30
FIBERMARK: Hiring Skadden Arps as Bankruptcy Attorneys
FIRST AMERICAN: Completes SNK Holdings & LOGS Fin'l Acquisition
FLEMING COS: Irving & Cavendish Ask Court To End Exclusive Periods
FLIR SYSTEMS: Wins $6.3 Million SAIC Contract for US Air Force
FORD MOTOR: Increases Second-Quarter Earnings Guidance
FOSTER WHEELER: Subsidiary Secures Service Contract in Thailand
GIT-N-GO: Kum & Go Acquires 76 Convenience Stores for $9 Million
GMAC COMMERCIAL: Fitch Affirms CCC Rating on Classes L & M Notes
GTC TELECOM: Telspan Withdraws Bid for Mexican Fiber Optic Network
INTERLINE BRANDS: S&P Places Low-B Ratings On CreditWatch Positive
JILLIAN'S ENTERTAINMENT: Hiring Frost Brown Todd as Co-Counsel
JJ'S I-17 OPPORTUNITIES: Case Summary & 11 Unsecured Creditors
NEWMARKET: Dan Scofield and Mike Tinsley Join Board of Directors
JP MORGAN: S&P Assigns Preliminary Low-B Ratings to 6 Classes
K2 INC: S&P Rates Corporate & Senior Debt Ratings at BB
KIEL BROS. OIL: Case Summary & 39 Largest Unsecured Creditors
LANTIS EYEWEAR: Seeks Nod to Hire Ordinary Course Professionals
MARKLIN PROPERTIES: US Trustee Doesn't Form a Creditors' Committee
MARSH SUPERMARKETS: S&P Airs Concerns Over Weak Sales Trends
MARVEL ENTERPRISES: Now Debt Free with Over $150 Million Cash
MIRANT CORPORATION: Wants To Consummate E&CS Settlement Agreement
MJ RESEARCH: Greenberg Traurig Serves as Litigation Counsel
MOTOR COACH: S&P Upgrades Corporate Credit Rating to B- from CCC
NATIONAL CENTURY: NPF X Sues NCRC & TRC to Collect $6M Payment
NRG ENERGY: Inks Stipulation Resolving Three ABN AMRO Bank Claims
PEGASUS SATELLITE: Has Until August 16 to File Schedules
PG&E NATIONAL: NEG Debtors Move to Reconcile Intercompany Claims
PRIDE INT'L: S&P Removes BB Corp. Debt Rating from Negative Watch
QWEST COMMUNICATIONS: S&P Raises Corporate Credit Rating to BB-
RCN CORPORATION: Proposes Interim Compensation Procedures
RENT-A-CENTER: Plans Senior Debt Refinancing in Third Quarter
ROYAL OLYMPIC: Unable to Beat Form 20-F Filing Deadline
SK GLOBAL AMERICA: Rejecting 1385 Broadway Office Lease
SPIEGEL: Agrees to Restructure Catalog Asset Purchase Agreement
ST. STEPHENS PARNERSHIP: Voluntary Chapter 11 Case Summary
STOLT-NIELSEN: Resolves Dispute with Senior Noteholders
TANGO INC: Annual Stockholders Meeting Slated for July 29
TUCKAHOE: S&P Raises Ratings on 2001-CTL1 Certificates To BB-
UNITED AIRLINES: Asks Court to Declare Payments Not Subject to Tax
US UNWIRED: Closes $360 Million Senior Secured Debt Offering
VIVENDI UNIVERSAL: Increases Offer to Purchase High Yield Notes
WEIRTON STEEL: Files Liquidation Plan & Disclosure Statement
WINDERMERE SCHOOL: Wants to Employ PCE as Financial Consultants
WORNICK CO: S&P Rates Corporate Credit & Senior Notes at B+
* Otterberg & Angeles Named AEG Partners' New Directors in Chicago
* Gardner Carton Adds New Partners to Financial Litigation Group
* PwC Names Fred Hipwell as Office Managing Partner in Las Vegas
* BOOK REVIEW: THE FIRST JUNK BOND -- A Story of Corporate
Boom and Bust
*********
ACE ELECTRICAL: Wants Until Plan Confirmation to Decide on Leases
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Ace Electrical Acquisition, LLC wants an open-ended extension of
its time to decide whether to assume, assume and assign, or reject
its unexpired nonresidential real property leases.
The Debtor tells the U.S. Bankruptcy Court for the Middle District
of Florida, Orlando Division that it is still in the process of
evaluating different avenues to effect a successful
reorganization, including the potential sale and assignment of its
leases. Thus, as of this moment, it is unable to determine
whether it is in the best interest of its estate to assume or
reject the leases. The Debtor wants to have until confirmation of
a plan to finalize its lease-related decisions.
Headquartered in Apopka, Florida, Ace Electrical Acquisition LLC
is engaged in manufacturing and buying-out products for the
automotive parts rebuilding industry and also sells complete
alternators and starters, and sources products from the United
States as well as China, Canada and Taiwan. The Company filed for
chapter 11 protection on March 23, 2004 (Bankr. M.D. Fla. Case No.
04-03224). R. Scott Shuker, Esq., at Kay, Gronek & Latham, LLP
represents the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed both
estimated debts and assets of over $10 million.
ADELPHIA COMMS: Lenders Agree to Amend $8.8BB Exit Financing Terms
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Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher LLP, in New
York, informs the Court that, on June 1, 2004, the Adelphia
Communications (ACOM) Debtors and the other parties to the
Commitment Letter and the other Financing Documents with respect
to the proposed $8,800,000,000 exit financing facility agreed to
amend the terms of the Commitment Letter, the Syndication Letter,
the Fee Letter, and the Engagement Letter. Copies of the amended
Syndication Letter, the amended Fee Letter, and the amended
Engagement Letter are filed under seal.
The material changes to the Financing Documents are:
A. Commitment Letter Amendment
(1) Extension of the Outside Date
The commitments of the Initial Lenders and the
obligations of the Arranger Group will expire on
June 30, 2005. That date will be extended to
September 30, 2005 in the event the ACOM Debtors'
Plan is confirmed on or before June 30, 2005.
The commitments of the Initial Lenders and the
obligations of the Arranger Group currently expire on
December 31, 2004. This date will be extended to
March 31, 2005 in the event the ACOM Debtors' Plan is
is confirmed on or before December 31, 2004.
(2) Ability of the Debtors to Terminate Commitment
The ACOM Debtors will have the ability to unilaterally
terminate the Amended Commitment Letter and all related
documents on the execution of a definitive agreement
which has been approved by ACOM's Board of Directors.
Pursuant to that agreement, the ACOM Debtors will sell
substantially all of their assets, taken as a whole, or
substantially all of ACOM's equity securities of, in
each case, whether by way of asset sale, merger,
consolidation or otherwise.
As a condition to the termination, the ACOM Debtors
will be required to, among other things:
(i) make a one-time lump sum payment to the Initial
Lenders amounting to $10,000,000 as contemplated
by the Fee Letter, as amended; and
(ii) have paid in full all other accrued fees and
expenses payable under the terms of the
Commitment Letter and the other Financing
Documents through the termination date.
The ACOM Debtors do not have that termination right
under the terms of the original Commitment Letter.
(3) Closing Condition Relating to Rigas-Managed Entities
The Amended Commitment Letter proposes to delete the
condition to the commitment of the Initial Lenders and
the obligations of the Arranger Group requiring that
the ACOM Debtors be subrogated to the rights of the
prepetition lenders under the ACOM Debtors' co-
borrowing credit facilities in respect of the
properties and assets of the Rigas-Managed Entities
used to secure the facilities. The Amended Commitment
Letter still requires, as conditions to the commitment
of the Initial Lenders and the obligations of the
Arranger Group, that the ACOM Debtors continue to
manage the Rigas-Managed Entities as of the Closing
Date.
(4) EBITDA Closing Condition
The Amended Commitment Letter proposes to modify the
pro forma Total Debt to EBITDA condition to the
commitment of the Initial Lenders and the obligations
of the Arranger Group so that the condition will be
contingent on ACOM's pro forma Total Debt to EBITDAR,
not EBITDA. In addition, under the Amended Commitment
Letter, if the Closing occurs on or after December 31,
2004, ACOM's Total Debt to EBITDAR for the most
recently ended fiscal quarter and multiplied by four
cannot be greater than 6.50 to 1.00.
B. Fee Letter Amendment
(1) Bridge Facility Fees
Under the terms of the Amended and Restated Fee Letter,
the ACOM Debtors will be required to pay to the Initial
Lenders an up-front, non-refundable $10,000,000 fee
within three business days after the Court approves the
Exit Facility.
In addition, the ACOM Debtors will be required to pay a
commitment fee in respect to the Bridge Facility. The
fee began accruing on February 24, 2004 and will be
payable on the earlier to occur of the Closing Date and
the date all of the commitments of the Initial Lenders
are terminated or expired. Assuming a March 31, 2005
closing of the Exit Facility and the Bridge Facility is
not drawn upon at closing, the total fees payable in
respect of the Bridge Facility will be $37,600,000.
(2) Termination of Commitments
The ACOM Debtors will pay the Initial Lenders a
$10,000,000 one-time lump sum fee in the event they
terminate the Commitment Letter and all related
documentation, including the Fee Letter, under certain
circumstances.
C. Engagement Letter Amendment
Under the terms of the Amended Engagement Letter, the ACOM
Debtors will have the ability to unilaterally terminate the
Engagement Letter if the Commitment Letter has terminated
pursuant to its terms. (Adelphia Bankruptcy News, Issue
No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADEPT TECHNOLOGY: Names Robert Strickland as VP Finance and CFO
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Adept Technology, Inc. (OTCBB:ADTK), a leading manufacturer of
robotic systems, motion control and machine vision technology
announced that Robert Strickland, has joined the Adept executive
management team as vice president of finance and chief financial
officer effective June 15, 2004. The appointment completes a major
step in the company's restructuring.
Mr. Strickland joins Adept with over 20 years of senior financial
management experience within both private and publicly traded
Silicon Valley manufacturing, retailing and biotechnology
companies. Prior to joining Adept, Mr. Strickland was executive
vice president of finance and CFO at Trend Technologies, Inc., a
$500 million contract manufacturer of electronics products.
Previously Mr. Strickland was vice president and CFO of Portola
Packaging, Inc, a plastics packaging products company. Mr.
Strickland received an MBA from the Columbia University Graduate
School of Business in New York and holds a mechanical engineering
degree from The Ohio State University.
"Bob's appointment rounds out our new executive team with
professionals focused on improving value for shareholders and
other stakeholders," said Rob Bucher, chairman and chief executive
officer for Adept Technology, Inc. "In transforming to a more
market-focused business, it is imperative to have an optimized
financial process and structure to support Adept's growth
initiatives and consistent profitability. These needs must be
consistent with our compliance activities. Bob's experience and
knowledge will be key to building this structure."
Reporting to Mr. Bucher, Mr. Strickland oversees the financial
activities of Adept Worldwide. Mr. Strickland will join Matt
Murphy, VP Operations and Product Development, John Dulchinos, VP
of Robotics, and the most recent additions to the executive team,
Lee Blake, VP of Customer Service, and Gordon Deans, VP of
Business Development and Adept Canada. Mr. Strickland replaces
Michael Overby, who will be transitioning his responsibilities and
then leaving the company to pursue other opportunities.
About the Company
Adept Technology designs, manufactures and markets robotic
systems, motion control and machine vision technology for the
telecommunications, electronics, semiconductor, automotive, lab
automation, and biomedical industries throughout the world.
Adept's robots, controllers, and software products are used for
small parts assembly, material handling and packaging. Adept's
intelligent automation product lines include industrial robots,
configurable linear modules, machine controllers for robot
mechanisms and other flexible automation equipment, machine
vision, systems and software, and application software. Founded in
1983, Adept Technology is America's largest manufacturer of
industrial robots. More information is available at
http://www.adept.com/
* * *
Liquidity and Capital Resources
In its Form 10-Q for the quarterly period ended March 27, 2004
filed with the Securities and Exchange Commission, Adept
Technology reports:
"We have experienced declining revenue in each of the last two
fiscal years and incurred net losses in the first three quarters
of fiscal 2004 and each of the last four fiscal years. During this
period, we have consumed significant cash and other financial
resources. In response to these conditions, we reduced operating
costs and employee headcount, and restructured certain operating
lease commitments in each of fiscal 2002 and fiscal 2003. We
recorded additional restructuring charges in the third quarter of
fiscal 2004 related to the departure of Messrs. Carlisle and
Shimano, pursuant to the Severance Agreements entered into between
Adept and each of them. These adjustments to our operations have
significantly reduced our rate of cash consumption. We also
completed an equity financing with net proceeds of approximately
$9.4 million in November 2003.
"As of March 27, 2004, we had working capital of approximately
$12.7 million, including $5.7 million in cash, cash equivalents
and short-term investments, and a short-term receivables financing
credit facility of $1.75 million net, of which $0.5 million was
outstanding and $1.3 million remained available under this
facility. On April 22, 2004, this facility was amended and now
permits us to borrow up to $4.0 million. We have limited cash
resources, and because of certain regulatory restrictions on our
ability to move certain cash reserves from our foreign operations
to our U.S. operations, we may have limited access to a portion of
our existing cash balances. In addition to the proceeds of our
2003 financing, we currently depend on funds generated from
operating revenue and the funds available through our amended
loan facility to meet our operating requirements. As a result, if
any of our assumptions, some of which are described below, are
incorrect, we may have difficulty satisfying our obligations in a
timely manner. We expect our cash ending balance to be between
approximately $5.0 and $5.5 million at June 30, 2004. Our ability
to effectively operate and grow our business is predicated upon
certain assumptions, including:
(i) that our restructuring efforts effectively reduce
operating costs as estimated by management and do not
impair our ability to generate revenue,
(ii) that we will not incur additional unplanned capital
expenditures for the next twelve months,
(iii) that we will continue to receive funds under our existing
accounts receivable financing arrangement or a new credit
facility,
(iv) that we will receive continued timely receipt of payment
of outstanding receivables, and not otherwise experience
severe cyclical swings in our receipts resulting in a
shortfall of cash available for our disbursements during
any given quarter, and
(v) that we will not incur unexpected significant cash
outlays during any quarter."
ADESA INC: Commences Initial Public Offering of 6.25MM Shares
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ADESA, Inc. (NYSE: KAR) announced its initial public offering of
6,250,000 shares of common stock at a price of $24 per share. All
of the shares were offered by the Company. ADESA's common stock
trades on the New York Stock Exchange under the symbol "KAR."
ADESA also announced that it plans to issue $125 million in senior
subordinated notes due 2012. Both offerings are expected to close
June 21, 2004.
UBS Investment Bank and Merrill Lynch & Co. served as the lead
managers on both offerings. The underwriters may purchase up to
937,500 shares of common stock solely to cover over-allotments.
Net proceeds to the Company will be used to repay outstanding debt
and to fund general corporate purposes.
About ADESA
ADESA is a leading national provider of wholesale vehicle auctions
and related vehicle redistribution services for the automotive
industry in North America. ADESA operates a network of 53 used
vehicles auctions, 27 salvage auctions and 80 AFC loan production
offices. ADESA, Inc., prior to the initial public offering, was a
wholly-owned subsidiary of ALLETE. For more information about
ADESA, visit the company's Web site at http://www.adesainc.com/
* * *
As reported in the Troubled Company Reporter, June 4, 2004 issue,
Standard & Poor's Rating Services assigned its 'B+' rating to
ADESA Inc.'s proposed $125 million senior subordinated notes due
2012, and affirmed its 'BB' corporate credit and senior secured
ratings on the Carmel, Indiana-based operator of wholesale used-
vehicle auctions and provider of used-vehicle floorplan financing.
The outlook is stable.
ADVANCED MEDICAL: S&P Affirms Low-B Corporate & Bank Loan Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit and bank loan ratings and its 'B' subordinated debt rating
on vision care company Advanced Medical Optics Inc.
At the same time, Standard & Poor's assigned its 'B' subordinated
debt rating to the company's proposed $275 million senior
subordinated convertible notes due in 2024.
Proceeds from the new notes are expected to be used to repurchase
the $70 million of its 9.25% senior subordinated notes due in 2010
that remain outstanding and to partly fund the $450 million
acquisition of Pfizer Inc.'s ophthalmic surgical business. New
bank lines are also expected to be used to finance this
acquisition. Pro forma for the proposed debt but not the
subsequent debt repayment, as of March 26, 2004, AMO would have
had approximately $960 million of debt outstanding.
The outlook is stable.
Santa Ana, California-based AMO manufactures ophthalmic devices
for refractive and cataract eye surgery. It also makes products
and solutions for contact lens care.
Since its mid-2002 spin-off from Allergan Inc., AMO has
strengthened its defense against changing eye-care technologies
and competitive market factors by launching new and evolved
products and honing its operating efficiency. The company has
increased its sales of, and market share in, foldable intraocular
lenses, IOL delivery systems, and phacoemulsification systems.
"The Pfizer ophthalmic surgical acquisition should enrich AMO's
cataract franchise by adding well-established viscoelastic
products used in ocular surgery, an important line it previously
lacked, and by adding the CeeOn and Tecnis IOLs," said Standard &
Poor's credit analyst Jill Unferth. The acquisition should also
add new refractive IOLs to AMO's new-product pipeline and provide
a small foothold in a new market, the glaucoma device business.
Medium-term sales growth will likely rest on new iterations of
these higher-technology-content products, new refractive implants,
and possible core-line acquisitions, such as the pending
transaction.
The company's contact lens solutions business, particularly its
COMPLETE line, should also continue to generate relatively stable
revenues. AMO is expected to realize savings as it further
disengages its R&D and manufacturing assets from Allergan's and
strengthens its internal infrastructure. However, third-party
reimbursement both in the U.S. and overseas remains a critical
factor for this company, owing to its operating concentration in a
relatively narrow range of ophthalmic surgical procedures.
AIR CANADA: May Abandon Attempts to Raise CN$250MM Capital
----------------------------------------------------------
Air Canada may abandon attempts to raise CN$250,000,000 in equity
capital funding, John Partridge of The Globe and Mail reported on
June 8, 2004.
Mr. Partridge cites an unnamed source who said that there is a
lack of compatibility between Air Canada and the two U.S.
investment funds the airline is negotiating with. As a result,
the source said that there is only about a 50% chance Air Canada
will cement a deal with either one. Another source, according to
Mr. Partridge, said that the 50% estimate "might even be high."
Air Canada is holding separate talks with Cerberus Capital
Management, LP, and Oak Hill Capital Partners, LP. Both
investment funds are based in New York.
Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and Section 304
petition with the U.S. Bankruptcy Court for the Southern District
of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and
Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the
Debtors' U.S. Counsel. When the Debtors filed for protection from
its creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue
No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AIR CANADA: Monitor Ernst & Young Provides Twenty-Seventh Report
----------------------------------------------------------------
Air Canada provides the following update on the airline's
restructuring under the Companies' Creditors Arrangement Act:
The Twenty-Seventh Report of the Monitor has been completed by
Ernst and Young Inc. and is available at http://www.aircanada.com/
The report includes:
1) A brief analysis of the Amended and Restated Commercial
Participation and Services Agreement between Air Canada and
Aeroplan dated June 9, 2004. The Monitor recommends Court
approval of the Agreement which expands the commercial
terms of the relationship to reflect the development and
expansion of the Aeroplan program
2) A brief update on the labour unions' ratification of the
renegotiated agreements described in the Twenty Sixth
Report.
Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and Section 304
petition with the U.S. Bankruptcy Court for the Southern District
of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and
Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the
Debtors' U.S. Counsel. When the Debtors filed for protection from
its creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities.
AMERICAN NATURAL: Files Rights Offering Registration Statement
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American Natural Energy Corporation (TSX Venture: ANR.U) announced
that it has filed a draft rights offering circular with Canadian
regulatory authorities and a registration statement with the U.S.
Securities and Exchange Commission for an offering of its shares
of common stock to its stockholders pursuant to transferable
rights proposed to be issued.
The subscription rights will provide for holders of shares of ANEC
common stock as of a record date to be established to receive the
right to buy one share of stock, at a price equivalent to 75% of
the closing price of ANEC stock on the TSX Venture Exchange on
Monday, June 14, 2004, for each four shares owned as of the record
date. The stock closed at US$0.31 on Monday, June 14, 2004 and
the per share subscription price is intended to be US$0.24. The
record date for the offering is intended to be the close of
business the day before the offering commences. The rights
offering, if fully subscribed, will raise approximately
US$1.6 million of additional equity for ANEC and the net proceeds
are intended to be used for ANEC's drilling activities, including
the re-drill of the ExxonMobil Fee No. 2 well, in its ExxonMobil
joint development project in Bayou Couba, St. Charles Parish,
Louisiana. Under Canadian securities legislation, the rights
offering may not proceed until the Canadian regulatory
authorities, including the TSX Venture Exchange, have reviewed the
circular and any comments of such authorities on the circular and
the offering have been addressed by ANEC. The commencement of the
rights offering is further subject to the effectiveness of the
registration statement filed with the U.S. Securities and Exchange
Commission.
Subscribing shareholders will also have over-subscription rights
for any rights not exercised by shareholders. If at least 85% of
the shares offered are sold, Michael Paulk, CEO and a director of
ANEC, and Steven Ensz, CFO and a director of ANEC have agreed to
purchase at the subscription price of US$0.24 such number of
remaining shares offered as may be required to sell the
entire subscription offering, subject to any regulatory approvals.
ANEC is a Tulsa, Oklahoma based independent exploration and
production company with operations in St. Charles Parish,
Louisiana.
In its Form 10-QSB for the for the quarterly period ended
March 31, 2004 filed with the Securities & Echange Commission,
American Natural Energy reported:
"The Company has no current borrowing capacity with any lender.
The Company has sustained substantial losses in the quarter ended
March 31, 2004 and during the year ended December 31, 2003
totaling approximately $0.4 million and $5.7 million and negative
cash flow from operations for the year ended December 31, 2003,
which leads to questions concerning the ability of the Company to
meet its obligations as they come due. The Company also has a need
for substantial funds to develop its oil and gas properties.
APPLIED EXTRUSION: Lowers Earnings Expectations & Retains Advisors
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Applied Extrusion Technologies, Inc. (NASDAQ NMS - AETC) announced
that it has lowered the Company's earnings expectations for the
second half of its fiscal year ended September 30, 2004.
Previously the Company believed that earnings and earnings before
interest, taxes, depreciation and amortization (EBITDA) for the
second half of fiscal year 2004 would exceed the results for the
first six months ended March 31, 2004. The Company expects the
volume of shipments to increase during the second half of the
year, but not as much as previously anticipated. More importantly,
polypropylene resin costs are expected to increase significantly
compared with the first half of fiscal 2004 due to the rapid
unforeseen escalations in costs of petroleum and associated
products such as propylene and polypropylene resin, the Company's
primary raw material. Recent price increases will offset a portion
of these additional costs; however, market demand has not been
sufficient to enable all of the cost increases to be passed on to
the Company's customers. Principally as a result of these
developments, the operating earnings and EBITDA for the second
half of fiscal 2004 are expected to be materially less than the
six months ended March 31, 2004.
The Company is working with its bank group to amend its covenants
under the credit facility to reflect the recent developments and
expects to make a related announcement as soon as information is
available.
In addition, the Company has received a number of new financing
proposals that would enable the Company to borrow up to an
additional $35 million to increase the Company's liquidity. While
there can be no assurance that it will do so, the Company believes
that such an additional facility could be funded prior to July 30,
2004, the expiration of the 30-day grace period for the payment of
interest provided for in the senior note indenture.
The Company also announced that it is exploring financing and
strategic alternatives with respect to its long-term capital
structure. To assist in this effort, the Company has retained
Miller Buckfire Lewis Ying & Co., LLC as financial advisor and
Shearman & Sterling LLP as special counsel. In addition, at the
Company's request the holders of the Company's 10 3/4% senior
notes have formed an ad hoc committee of bondholders to explore
the alternatives that the Company may wish to pursue. The
bondholders forming the committee have represented to the Company
that they hold, in the aggregate, in excess of a majority of the
outstanding 10 3/4% senior notes.
About the Company
Applied Extrusion Technologies, Inc. is a leading North American
developer and manufacturer of specialized oriented polypropylene
(OPP) films used primarily in consumer products labeling and
flexible packaging application.
As reported in the Troubled Company Reporter's May 19, 2004
edition, Standard & Poor's Ratings Services lowered its corporate
credit rating on New Castle, Delaware-based Applied Extrusion
Technologies Inc. to 'CCC' from 'B-'. At the same time, Standard &
Poor's lowered its ratings on the company's senior unsecured notes
to 'CC' from 'CCC'. The outlook remains negative. Applied
Extrusion had outstanding debt of approximately $362 million at
March 31,
2004.
"The downgrade reflects Applied Extrusion's extended poor
operating and financial performance, weakened liquidity position,
very aggressive debt leverage, and negative cash flows," said
Standard & Poor's credit analyst Paul Blake.
ARMSTRONG: Asks Court To Extend Deadline To Remove Litigation
-------------------------------------------------------------
Armstrong World Industries, Inc., Nitram Liquidators, Inc., and
Desseaux Corporation of North America seek a further extension of
their time to file notices to remove prepetition lawsuits and
administrative proceedings, through and including:
(i) 30 days after the date on which an order confirming
the Plan is entered by the United States District Court
for the District of Delaware; or
(ii) 30 days after entry of an order terminating the
automatic stay with respect to any particular action
sought to be removed.
Rebecca L. Booth, Esq., at Richards Layton & Finger, reminds Judge
Fitzgerald that the Debtors are parties to numerous judicial and
administrative proceedings currently pending before various courts
or administrative agencies throughout the country. Due to the
number of proceedings involved, and the wide variety of claims
these proceedings present, the Debtors need more time to determine
which, if any, of the proceedings should be removed and, if
appropriate, transferred to this district.
At the time that the last extension was granted, the parties
anticipated that both Judge Newsome and District Judge Wolin would
preside jointly over a hearing on the confirmation of the Plan in
November 2003, and that the Debtors would emerge from bankruptcy
by the end of 2003 -- making any further extensions of the Removal
Deadline irrelevant. In light of the changed circumstances, the
Debtors find it necessary to extend the Removal Period. The
extension would protect the Debtors' valuable right to
economically adjudicate lawsuits if the circumstances warrant
removal.
The extension will not prejudice the Debtors' adversaries because
they may not prosecute the actions and proceedings pending relief
from the stay. Furthermore, the Debtors assure the Court that the
extension will not prejudice a party to a proceeding that the
Debtors seek to remove because the party may seek remand of any
removed action or proceeding.
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world. The Company
filed for chapter 11 protection on December 6, 2000 (Bankr. Del.
Case No. 00-04469). Stephen Karotkin, Esq., Weil, Gotshal &
Manges LLP and Russell C. Silberglied, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors in in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $4,032,200,000 in total assets and
$3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue
No. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ARROW AIR: Appoints Globe Air Cargo as General Sales Agent
----------------------------------------------------------
Arrow Air announced the appointment of Globe Air Cargo as its
general sales agent for the Western United States.
"We are pleased to have selected Globe Air Cargo to represent us
in an area of the country where we had limited exposure. As we
emerge from bankruptcy protection, we look forward to growing our
relationship with freight forwarders in all areas of the country,
particularly in an important air cargo market such as the Western
U.S.," said Lynn Christ, Vice President Commercial Planning and
Business Development for the all-cargo airline. "We look to Globe
Air Cargo to deliver Arrow's high standards of customer service
and to assist us in continuing to grow revenues," she added.
About Globe Air Cargo
Globe Air Cargo is a general sales agency company specialized in
providing outsourced sales solutions to airlines. The company
operates a global sales network serving more than 100 commercial
airlines worldwide, including operations in the United States,
Canada, Latin America, Europe, and Asia. "We are very proud of our
new association with Arrow Air and we look forward to growing
their market presence and visibility," said Arturo Horton, Vice
President Business Development.
About Arrow Air
Arrow Air has been rooted in South Florida for nearly six decades
and operates an extensive freighter schedule between the U.S. and
the Caribbean and South and Central America. The airline serves
more than 3,500 customers worldwide, including international and
domestic forwarders, integrated carriers, passenger and cargo
airlines, and the U.S. Department of Defense and the U.S. Postal
Service.
BEVERLY ENTERPRISES: Fitch Rates Planned $225MM Sub. Notes at B+
----------------------------------------------------------------
Fitch Ratings has assigned a 'B+' rating to Beverly Enterprises,
Inc.'s planned up-to $225 million, 10-year, subordinated notes
issue. Proceeds from the new issue will be used to fund the recent
tender offer for the company's 'BB-' rated, $200 million, 9 5/8%
senior unsecured notes due 2009. In conjunction, Fitch has
affirmed the company's 'BB' secured bank facility, 'BB-' senior
unsecured debt and 'B+' rated subordinated convertible notes. The
Rating Outlook is Stable.
Fitch notes that BEV's credit profile is improving following a
difficult 2003 that saw profitability negatively impacted by
rising patient liability costs and reduced Medicare reimbursement.
Key factors driving the improvement include strong volume growth,
increased Medicare and Medicaid per-diem rates, a significant
reduction in patient liability-related costs and lower interest
costs due to refinancing activities.
Fitch notes that BEV's Q1 '04 EBITDA margin expanded to 9.0% from
6.4% in Q1 '03 and from 7.4% for FY 2003 due to a favorable
patient mix, strong pricing and volume growth and enhanced by the
company's cost containment efforts. The company increased its
EBITDA guidance for the full year 2004 from approximately 150
million to between $175 million and $180 million. The company
anticipates full-year 2004 EBITDA margin to be approximately 9%.
In addition to strong volume and pricing, BEV specifically cited
the implementation of its labor management system as a driving
force in keeping costs down. Additionally, the company has
instituted more rigorous patient review standards to ensure that
in states where Medicaid rates are based on patient acuity, BEV is
properly classifying patients in order to receive correct
reimbursement. Furthermore, BEV has also reported sequential
reductions in insurance costs due to better claims experience and
as a result of divesting facilities with high liability exposure.
BEV's ratings also consider the company's pending cash acquisition
of Hospice USA, LLC, a privately held company providing hospice
services to Mississippi, Alabama and Tennessee. While BEV expects
the acquisition to be accretive to pretax income by more than $6
million in the first full year, terms of the transaction were not
publicly disclosed. Closing is expected on or about July 31. The
acquisition is consistent with BEV strategy to better-diversify
the company in terms of higher-margined (and in this case lower-
risk in terms of patient liability exposure) patient services that
are less dependent on government-funded reimbursement.
BEV's debt levels have moderated as proceeds from the company's
divestiture program have been used to reduce both on and off-
balance sheet debt. BEV used disposition proceeds to reduce debt
by $133 million in 2003 on top of a $155 million reduction in
2002. Additionally, effective June 15, 2004 BEV unwound its off-
balance sheet A/R facility by repaying $70 million of off-balance
sheet, medium-term notes related to BFC. In conjunction with the
unwinding of BFC, BEV will recoup approximately $32 million in
cash from liquidated receivables that has accumulated beyond the
$70 million the company will repay. The unwinding of BFC will
eliminate the last of the company's off-balance sheet debt
obligations. During 2003, BEV paid down a $70 million, off-balance
sheet synthetic lease. While most of the company's long-term debt
has been recently refinanced with better rates and extended
maturities, additional reductions in facility-level debt is
possible as the company continues to pursue its divestiture
program. Following the tender, the new issue and unwinding of BFC,
total debt will be approximately $590 million.
While Fitch notes that BEV's credit profile has improved and that
additional improvement is possible, cash flow remains modest and
government reimbursement remains the primary source of company
revenues. Additionally, labor and supply costs which have remained
relatively stable bear monitoring. For the 12 months ended March
31, 2004, BEV's coverage was 3.4 times (x) and leverage was 3.5x
and cash flow from operations (CFFO) was $22 million. Full year,
2003 CFFO was $70 million and free cash flow was $26 million.
BNS CO: Completes U.K. Asset Sale for GB5.5 Million
---------------------------------------------------
BNS Co. (OTCBB:BNSXA) announced that it has completed the sale of
the company's U.K. assets, consisting of approximately 86.5 acres
of land currently operated as a landfill near Heathrow Airport,
for an aggregate of 5.5 million British Pounds. A portion of the
sales price has been placed in escrow pending resolution of
certain U.K. Tax Issues, and there will be a post closing
adjustment for the net working capital of the company's U.K.
Subsidiary. The terms of the sale are fully described in the
company's Proxy Statement filed with the SEC prior to its June 11
Annual Meeting, at which the shareholders approved the sale.
Following the June 11 Annual Meeting, the company's Board of
Directors met to review strategic alternatives for the company and
agreed that continuing as a going concern was the best course
available. The board then authorized management to launch a search
for a suitable acquisition candidate. After the sale of the U.K.
assets and the 2003 sale of the company's Rhode Island property,
the company now has in excess of $20 million in cash, most of
which is unrestricted, and has no debt.
"The acquisition of an operating business will allow us to
preserve the use of the company's approximately $45 million in net
operating loss carry-forwards to offset otherwise taxable
earnings," said Michael Warren, the company's President and CEO.
"It may also give us time to continue effectively resolving,
through settlement or dismissal, the company's contingent product
liability claims. It seems clear to us that if we cannot safely
make significant cash distributions to shareholders in a
liquidation scenario now, then a reasonable course of action would
be to put that cash to work through some form of investment or
acquisition, with the prospect of distributions in the future."
"I find it somewhat ironic that after a concerted effort to
liquidate and dissolve, BNS Co., the successor entity that can
trace its roots all the way back to the original business, may
find itself back in a real operating business," commented Kenneth
Kermes, Chairman of the Board of Directors and former CEO. "The
company has a lot to bring to the table in an acquisition,
including a seasoned board, public company infrastructure,
significant tax shelters and, with the exception of the contingent
discontinued product claims, a clean balance sheet."
About the Company
BNS Co., formerly known as Brown & Sharpe Manufacturing Company,
is a Rhode Island icon and one of the oldest corporations in
America. The company was established in 1833, just seven years
after the death of Thomas Jefferson and John Adams. It played a
significant role in the industrial revolution as an innovative
manufacturer of machine tools and precision measurement
instruments. It has been in continuous operation since then but in
recent years has been gradually selling its operating units.
BUSH INDUSTRIES: Gets Court OK to Hire Hodgson Russ as Attorneys
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
gave its stamp of approval to Bush Industries, Inc.'s request to
hire and employ Hodgson Russ LLP as its counsel.
Hodgson Russ' Bankruptcy and Commercial Litigation Practice Group
is composed of approximately 10 attorneys practicing in the
Western District of New York and in many other districts across
the United States.
Hodgson Russ is also familiar with the Debtor's business and
financial affairs, corporate history, debt structure, business and
operational difficulties and related matters. During the course of
its preparation for this engagement, the firm has developed
significant knowledge regarding the Debtor that will assist it in
providing effective and efficient services in this chapter 11
case.
Hodgson Russ will:
a) advise the Debtor of its rights, powers and duties as
debtor and debtor in possession in continuing to operate
and manage its business and properties under chapter 11 of
the Bankruptcy Code;
b) prepare, on behalf of the Debtor, all necessary and
appropriate applications, motions, draft orders, other
pleadings, notices, schedules and other documents, and
reviewing all financial and other reports to be filed in
this chapter 11 case;
c) advise the Debtor concerning, and preparing responses to,
applications, motions, other pleadings, notices and other
papers that may be filed and served in this chapter 11
case;
d) advise the Debtor with respect to, and assisting in the
negotiation and documentation of, financing agreements,
debt and cash collateral orders and related transactions;
e) review the nature and validity of any liens asserted
against the Debtor's property and advising the Debtor
concerning the enforceability of such liens;
f) advise the Debtor regarding its ability to initiate
actions to collect and recover property for the benefit of
its estates;
g) counsel the Debtor in connection with, and assisting in
the preparation of, a plan or plans of reorganization and
related documents;
h) advise and assist the Debtor in connection with any
potential property dispositions;
i) advise the Debtor concerning executory contract and
unexpired lease assumptions, assignments and rejections
and lease restructurings and recharacterizations;
j) assist the Debtor in reviewing, estimating and resolving
claims asserted against the Debtor's estate;
k) commence and conduct any and all litigation necessary or
appropriate to assert rights held by the Debtor, protect
assets of the Debtor's chapter 11 estate or otherwise
further the goal of completing the Debtor's successful
reorganization;
l) provide general corporate, litigation, regulatory and
other non-bankruptcy services as requested by the Debtor;
and
m) appear in Court on behalf of the Debtor as needed in
connection with the foregoing and otherwise;
n) perform all other necessary or appropriate legal services
in connection with this chapter 11 case for or on behalf
of the Debtor.
The Debtor paid Hodgson Russ $520,696 during the year immediately
preceding the Petition Date on account of fees and expenses
incurred in preparation for its chapter 11 case. Gary M. Graber,
Esq., reports that after the Debtor has paid all expenses as of
March 31, 2004, there remains a balance of $307,139, which the
firm is holding as a retainer for services to be rendered in
connection with this chapter 11 case.
Headquartered in Jamestown, New York, Bush Industries, Inc.,
-- http://www.bushindustries.com/-- is engaged in the manufacture
and sale of ready-to-assemble furniture under the Bush, Eric
Morgan and Rohr trade names and production of after market
accessories for cell phones. The Company filed for chapter 11
protection on March 31, 2004 (Bankr. W.D.N.Y. Case No. 04-12295).
Garry M. Graber, Esq., at Hodgson, Russ represents the Debtor in
its restructuring efforts. When the Company filed for protection
from its creditors, it listed $53,265,106 in total assets and
$169,589,800 in total debts.
CAREMARK: Will Present at Wachovia Securities' June 23 Conference
-----------------------------------------------------------------
Caremark Rx, Inc. (NYSE: CMX) announced its intention to present
at the upcoming Wachovia Securities Nantucket Equity Conference.
The presentation is scheduled for Wednesday, June 23, 2004, at the
Harbor House Hotel in Nantucket, Massachusetts. An audio
presentation will be broadcast live via the Internet.
The audio webcast information is as follows:
Date: Wednesday, June 23, 2004
Time: 11:15 AM Eastern Time
Webcast Location: http://www.wsw.com/webcast/wa22/cmx/
The slide presentation will be available, along with the audio
webcast, under the "Events" section of the Investor Relations page
at http://www.caremarkrx.com.The webcast will be archived and
available for replay until July 7, 2004.
About Caremark Rx, Inc.
Caremark Rx, Inc. is a leading pharmaceutical services company,
providing through its affiliates comprehensive drug benefit
services to over 2,000 health plan sponsors and their plan
participants throughout the U.S. Caremark's clients include
corporate health plans, managed care organizations, insurance
companies, unions, government agencies and other funded benefit
plans. The company operates a national retail pharmacy network
with over 55,000 participating pharmacies, seven mail service
pharmacies, the industry's only FDA-regulated repackaging plant
and 23 specialty pharmacies for delivery of advanced medications
to individuals with chronic or genetic diseases and disorders.
* * *
As reported in the Troubled Company Reporter's February 16, 2004
edition, Standard & Poor's Ratings Services said that its ratings
on Nashville, Tennessee-based pharmacy benefit manager Caremark
Rx.Inc. remained on CreditWatch with positive implications. These
include the company's 'BBB-' long-term corporate credit and senior
secured debt ratings as well as the 'BB+' rating on its $450
million in 7.375% senior secured notes. The ratings were
originally placed on CreditWatch on Sept. 3, 2003, following the
company's announcement that it intended to acquire its rival,
AdvancePCS, in a $6 billion transaction funded mostly by stock.
AdvancePCS' ratings also remain on CreditWatch with positive
implications, including its 'BB+' corporate credit and senior
secured debt ratings as well as its 'BB' senior unsecured debt
ratings.
CARMA FINANCIAL: Appoints David Aiello as Chief Executive Officer
-----------------------------------------------------------------
Carma Financial Services Corporation (Symbol: CFS) announces that
its Board of Directors has appointed David Aiello as Chief
Executive Officer, President, and Chief Operating Officer.
Mr. Aiello, through his holding company 6232051 Canada Inc.,
recently acquired approximately 55% of the outstanding shares,
representing a substantial investment and financial commitment in
CARMA.
Mr. Aiello, CA is a Toronto area accountant and is the CEO,
President, and controlling shareholder of Synergex Group of
Companies, a substantial logistics and distribution business.
The Board has appointed Nick Blasutto, CA, CBV as Chief Financial
Officer, to replace Mr. Aiello who previously held this position.
Mr. Blasutto is also Chief Financial Officer of the Synergex Group
of Companies, a position he has held for approximately two years.
He has previously worked for both a major accounting firm and a
business valuation firm.
The Board confirms John L. Smith's continued role as President and
Chief Operating Officer of CARMA's operating companies Canada
Bonded Attorney and Legal Directory Limited and Lumbermen's Credit
Bureau Limited. Mr. Smith is a director, and will also be
appointed as Corporate Secretary and Senior Vice President of
CARMA.
CARMA is a provider of Business to Business accounts receivable
management services including business information, accounts
receivable recovery, and asset based financing through its wholly
owned subsidiaries Canada Bonded Attorney and Legal Directory
Limited and Lumbermen's Credit Bureau Limited. CARMA is quoted on
the TSX Venture Exchange under the symbol CFS.
At February 29, 2004, Carma Financial Services's balance sheet
shows a total shareholders' deficit of $103,364 compared to a
deficit of $139,592 at May 31, 2003.
CARMA FINANCIAL: Acquires Legal Credit Recovery Corporation
-----------------------------------------------------------
Carma Financial Services Corporation (Symbol: CFS) announces that
it has completed its previously announced purchase of Legal Credit
Recovery Corp.
CARMA is a provider of Business-to-Business accounts receivable
management services including Business Information, Accounts
Receivable Recovery, Accounts Receivable Management and Asset
Based Lending through its wholly owned subsidiaries Canada Bonded
Attorney, Lumbermen's Credit Bureau and Mercantile Credit Bureau.
CARMA is quoted on the TSX Venture Exchange under the symbol CFS.
At February 29, 2004, Carma Financial Services's balance sheet
shows a total shareholders' deficit of $103,364 compared to a
deficit of $139,592 at May 31, 2003.
CENTRAL COLUMBIANA: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Central Columbiana & Pennsylvania Railway, Inc.
4416 South Arkansas Avenue
Russellville, Arkansas 72802
Bankruptcy Case No.: 04-16887
Chapter 11 Petition Date: June 14, 2004
Court: Eastern District of Arkansas (Little Rock)
Judge: James G. Mixon
Debtor's Counsel: James E. Smith, Jr.
Law Office of James E. Smith, Jr.
400 West Capitol Avenue, Suite 1700
Little Rock, AR 72201
Tel: 501-537-5111
Fax: 501-537-5113
Total Assets: $0 to $50,000
Total Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Ouachita Railroad, Inc. Loan $772,930
4416 South Arkansas
Russellville, AR 72802
Arkansas Short Line Accounts Payable $483,300
Railroads and Note
4416 South Arkansas
Russellville, AR 72802
Columbiana City Port Line of Credit - Loan $445,696
Authority
Attn: Tracey Drake
1250 St. George Street
East Liverpool, OH 43920
National City Bank Loan $150,000
Ohio Track, Inc. Accounts Payable $132,060
Jones, Rose & Lawton Accounts Payable $52,175
CSX Transportation, Inc. Accounts Payable $46,496
Barnes & Thornburg Professional Fees $34,811
Railworks Track Services, Accounts Payable $33,440
Inc.
Hulcher Services, Inc. Accounts Payable $19,220
Columbiana City Port Note Payable $18,300
Authority
Solar Oil Company Accounts Payable $16,379
Mahoning County Treasurer Property Taxes $15,904
R J Corman Derailment Accounts Payable $15,611
Services
Wheeling Technologies, Inc. Accounts Payable $12,781
American Railroad Accounts Payable $11,500
Construction
Burke-Parsons-Bowlby Corp. Accounts Payable $10,755
First Union Rail Corp. Accounts Payable $9,422
Union Pacific Railroad Accounts Payable $8,141
Columbiana County Treasurer Property Taxes $7,574
CELESTICA INC: Completes Sale of 7.875% Senior Subordinated Notes
-----------------------------------------------------------------
Celestica Inc. (NYSE, TSX: CLS), a world leader in electronics
manufacturing services (EMS), announced that it has completed its
previously announced sale of $US500 million, 7.875% senior
subordinated notes due 2011.
The net proceeds from the sale are currently anticipated to be
used for repurchase of Liquid Yield Option Notes, or LYONs, and
general corporate purposes, including future acquisitions.
Citigroup Global Markets Inc., Banc of America Securities LLC and
Deutsche Bank Securities Inc. acted as joint book-running managers
for Celestica's notes offering.
About Celestica
Celestica is a world leader in the delivery of innovative
electronics manufacturing services (EMS). Celestica operates a
highly sophisticated global manufacturing network with operations
in Asia, Europe and the Americas, providing a broad range of
integrated services and solutions to leading OEMs (original
equipment manufacturers). Celestica's expertise in quality,
technology and supply chain management, enables the company to
provide competitive advantage to its customers by improving time-
to-market, scalability and manufacturing efficiency.
As reported in the Troubled Company Reporter's March 31, 2004
edition, Standard & Poor's Ratings Services lowered it long-term
corporate credit rating and unsecured debt on Celestica Inc. to
'BB' from 'BB+'. At the same time, Standard & Poor's lowered its
subordinated debt rating on the company to 'B+' from 'BB-'.
The outlook is negative.
"The ratings on Celestica reflect the continued difficult end-
market conditions and sub par operating performance in the highly
competitive electronic manufacturing services sector," said
Standard & Poor's credit analyst Michelle Aubin. These factors are
partially offset by the company's tier-one position in the EMS
sector and longer-term trends favoring electronic manufacturing
outsourcing.
The negative outlook reflects Standard & Poor's expectation that
revenues and operating performance will improve and that negative
free operating cash flow will moderate in fiscal 2004. Any decline
from expectations could result in the ratings being lowered.
CHAMBERS STREET: S&P Assigns Low-B Ratings to Classes C & D
-----------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Chambers
Street CDO Ltd.'s class B, C, and D notes due April 3, 2007 on
CreditWatch with positive implications. At the same time, the
rating on the class A notes is affirmed.
The CreditWatch placements reflect the improvement of the credit
quality of the reference credits, the level of credit enhancement
provided by subordination, and Chambers Street CDO Ltd.'s ability
to meet its payment obligations as issuer of the secured notes.
Ratings Placed On CreditWatch Positive
Chambers Street CDO Ltd.
Class Rating
To From
B AA-/Watch Pos AA-
C BB/Watch Pos BB
D B-/Watch Pos B-
Rating Affirmed
Chambers Street CDO Ltd.
Class Rating
A AAA
COINMACH CORP: S&P Cuts Corporate & Senior Debt Ratings to B+
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured bank loan ratings on laundry equipment services
provider Coinmach Corp. to 'B+' from 'BB-'. At the same time,
Coinmach's senior unsecured debt rating was lowered to 'B-' from
'B'. Coinmach had about $720 million of debt outstanding as of
Mar. 31, 2004.
The ratings remain on CreditWatch with negative implications,
where they were placed April 13, 2004, following the filing by
Coinmach's parent company, Coinmach Service Corp., of a
registration statement with the SEC for an initial public offering
of income deposit securities, representing shares of CSC's Class A
common stock and subordinated debt. In connection with this
offering, Coinmach is expected to redeem a portion of its
outstanding subordinated notes due 2010 and some of its existing
secured bank debt. The remaining proceeds will be used to redeem
only a portion of debt-like preferred stock (due 2010) of
Coinmach's immediate parent company, Coinmach Laundry Corp., and
pay fees related to the financing.
"The downgrade reflects Standard & Poor's prior concerns with
Coinmach's weakened financial profile and credit protection
measures," said Standard & Poor's credit analyst Jean Stout. "High
vacancy rates in the firm's key markets and higher costs,
primarily related to insurance and health care, continue to
pressure the company's financial performance. Standard & Poor's
anticipates that the company's credit measures will not return to
prior levels in the near term."
The CreditWatch listing, portending further downgrades, continues
to reflect Standard & Poor's belief that the proposed IDS
structure would exhibit a more aggressive financial policy and
additionally reduce financial flexibility, given the anticipated
high dividend payout rate.
Plainview, New York-based Coinmach is the leading supplier of
outsourced laundry services for multifamily housing properties in
North America, with a strong presence in the Northeast, Mid-
Atlantic, Southwest, and Southeast regions.
CONSOLIDATED FREIGHTWAYS: Seattle Asset Sale Moved to June 22
-------------------------------------------------------------
As part of the largest real estate sale in transportation history
-- 229 total properties with an appraised value over $400 million
-- Consolidated Freightways announced that it has rescheduled sale
of its Seattle distribution facility, located at 6050 East
Marginal Way, to the highest bidder, through a reserve auction
process scheduled for June 22, 2004.
The Seattle property is a 118-door cross-dock distribution
facility situated on 13.58 acres and has been closed to operations
since September 3, 2002, when the 75-year-old company filed for
bankruptcy protection. Since then, CF has been liquidating the
assets of the corporation under orders of the bankruptcy court.
237 CF employees formerly worked at the Seattle terminal.
A starting price of $7,700,000 has been established for the CF
property. Interested parties who would like to participate in the
June bankruptcy auction should submit the form Request to be
Designated a Qualified Bidder at Auction. That form can be found
at http://www.cfterminals.com/Overbidder.htmland must be
submitted prior to the date of the auction. The indicated deposit
must also be received, via wire or certified check, prior to the
date of the auction.
To date, 205 CF properties throughout the U.S. have been sold for
over $350 million. Potential bidders should direct any questions
about the property and the bidding procedures that cannot be
answered at the company's Web site http://www.cfterminals.com/to
Transportation Property Company at 800-440-5155.
About the Company
Consolidated Freightways Corporation (Nasdaq:CFWY) is a
$2.2 billion company comprised of national less-than-truckload
carrier Consolidated Freightways, third party logistics provider
Redwood Systems, Canadian Freightways LTD, Grupo Consolidated
Freightways in Mexico and CF AirFreight, an air freight forwarder.
Consolidated Freightways is a transportation company primarily
providing LTL freight transportation throughout North America
using its system of 300 terminals and over 18,000 employees.
CONSOLIDATED FREIGHTWAYS: Selling Grand Forks Facility June 22
--------------------------------------------------------------
As part of the largest real estate sale in transportation history
-- 229 total properties with an appraised value over $400 million
-- Consolidated Freightways announced that it is placing its Grand
Forks distribution facility located at 5515 University Ave. for
sale to the highest bidder, through an open auction process
scheduled for June 22, 2004.
The Grand Forks property is a 36-door cross-dock distribution
facility situated on 3.18 acres and has been closed to operations
since September 3, 2002 when the 75-year-old company filed for
bankruptcy protection. Since then CF has been liquidating the
assets of the corporation under orders of the bankruptcy court.
Two CF employees formerly worked at the Grand Forks terminal.
A contract price of $175,000 has been established for the CF
property. Interested parties who would like to participate in the
June bankruptcy auction should submit the form Request to be
Designated a Qualified Bidder at Auction. That form can be found
at http://www.cfterminals.com/Overbidder.htmland must be
submitted prior to the date of the auction. The indicated deposit
must also be received, via wire or certified check, prior to the
date of the auction.
To date, 205 CF properties throughout the U.S. have been sold for
$350 million. Potential bidders should direct any questions about
the property and the bidding procedures that cannot be answered at
the company's web site http://www.cfterminals.com/to
Transportation Property Company at 800-440-5155.
About the Company
Consolidated Freightways Corporation (Nasdaq:CFWY) is a
$2.2 billion company comprised of national less-than-truckload
carrier Consolidated Freightways, third party logistics provider
Redwood Systems, Canadian Freightways LTD, Grupo Consolidated
Freightways in Mexico and CF AirFreight, an air freight forwarder.
Consolidated Freightways is a transportation company primarily
providing LTL freight transportation throughout North America
using its system of 300 terminals and over 18,000 employees.
CONSOLIDATED FREIGHTWAYS: Milwaukee & Marinette Assets Up for Sale
------------------------------------------------------------------
As part of the largest real estate sale in transportation history
-- 229 total properties with an appraised value over $400 million
-- Consolidated Freightways announced that it is placing its
Milwaukee and Marinette distribution facilities individually for
sale to the highest bidder, through an auction process scheduled
for June 22, 2004.
The Milwaukee property is located at 401 West Layton Ave. and
consists of two terminals, an 85-door cross-dock distribution
facility and 67-door cross-dock distribution facility, both
situated on 28.4 acres. A reserve auction starting price of
$2,500,000 has been established for the CF property. 230 CF
employees formerly worked at the Milwaukee terminals.
The Marinette terminal is located at 2431 Biehl Ave. and is an 8-
door cross-dock distribution facility situated on 3 acres. It is
being sold in open auction and a contract price of $180,000 has
been established. Seven CF employees formerly worked at the
Marinette terminal.
CF terminals have been closed to operations since September 3,
2002 when the 75-year-old company filed for bankruptcy protection.
Since then CF has been liquidating the assets of the corporation
under orders of the bankruptcy court.
Interested parties who would like to participate in the June
bankruptcy auction should submit the form Request to be Designated
a Qualified Bidder at Auction. That form can be found at
http://www.cfterminals.com/Overbidder.htmland must be submitted
prior to the date of the auction. The indicated deposit must also
be received, via wire or certified check, prior to the date of the
auction.
To date, 205 CF properties throughout the U.S. have been sold for
$350 million. Potential bidders should direct any questions about
the property and the bidding procedures that cannot be answered at
the company's web site http://www.cfterminals.com/to
Transportation Property Company at 800-440-5155.
About the Company
Consolidated Freightways Corporation (Nasdaq:CFWY) is a
$2.2 billion company comprised of national less-than-truckload
carrier Consolidated Freightways, third party logistics provider
Redwood Systems, Canadian Freightways LTD, Grupo Consolidated
Freightways in Mexico and CF AirFreight, an air freight forwarder.
Consolidated Freightways is a transportation company primarily
providing LTL freight transportation throughout North America
using its system of 300 terminals and over 18,000 employees.
COVANTA TAMPA: Asks Court to Disallow A&A Coastal's $845K+ Claims
-----------------------------------------------------------------
Debtors Covanta Tampa Bay, Inc., and Covanta Tampa Construction,
Inc., ask the Court to disallow and expunge two A&A Coastal
Claims:
Claim No. Amount
-------- --------
4591 $739,124
4587 106,752
In connection with the Covanta Tampa Debtors' role as contractor
in the engineering, procurement and construction of a
desalination facility in the Tampa Bay, Florida area, the Covanta
Tampa Debtors entered into a Materials Supply and Construction
Services Contract with A&A Coastal on November 15, 2001. Under
the A&A Subcontract, A&A Coastal provides labor, material,
equipment, and all construction and other services necessary for
the installation of Intake Structure and Site Piping.
Vincent E. Lazar, Esq., at Jenner & Block, in Chicago, Illinois,
relates that, by Summer 2002, A&A Coastal defaulted under the A&A
Subcontract by failing to make sufficient progress, and pay its
materialmen and suppliers. A&A Coastal's failure to pay its
subcontractors and materialmen resulted in those parties issuing
notices of non-payment to the Debtors and filing several liens
against the Debtors.
On July 23, 2002, the Covanta Tampa Debtors terminated the A&A
Coastal Subcontract for default. At the time of termination, the
Covanta Tampa Debtors owed A&A Coastal but in amounts
substantially less than the amount A&A Coastal asserts in its
claims.
As of July 23, 2002, A&A Coastal owed substantial unpaid sums to
its suppliers and materialmen whom the Covanta Tampa Debtors and
their surety eventually paid in amounts totaling more than
$1,113,583. In settling the claims of A&A Coastal's materialmen
and subcontractors, the Covanta Tampa Debtors and their sureties
incurred substantial sums in attorney's fees, which the Covanta
Tampa Debtors are entitled to recover under the A&A Subcontract.
After terminating the A&A Coastal Subcontract, the Covanta Tampa
Debtors retained another subcontractor, Vogel Brothers Building
Company, to complete the work left unfinished by A&A Coastal.
Even after its termination, A&A Coastal still performed a limited
amount of additional work, but as a subcontractor to Vogel
Brothers.
A&A Coastal's Claims Must Be Disallowed
In Claim No. 4591, A&A Coastal seeks to recover, among others,
the retainage on the total contract purportedly completed as of
July 23, 2002. Among the various components comprising Claim No.
4591, A&A Coastal included $194,957 for "Retainage,"
corresponding to 10% of the total work that A&A Coastal asserts
was completed and "stored to date." It includes the retainage
for December 2001 through March 2002, sought in Claim No. 4587.
Because Claim No. 4587 duplicatively asserts a claim for
retainage that is subsumed in Claim No. 4591, Claim No. 4587 must
be disallowed.
A&A Coastal calculated the $739,124 amount asserted in Claim No.
4591 by:
Due from the Debtors as of July 23, 2002 $774,830
A&A Coastal's work performed for August
and September 2003 215,148
--------
Total 989,978
Less: the Debtors and sureties' payment
to A&A's subcontractors and materialmen 250,854
--------
Claim Amount $739,124
========
Mr. Lazar points out that A&A Coastal mistakenly asserts that the
Debtors and their sureties only paid $250,854 to A&A Coastal's
subcontractors. The Debtors and their sureties have paid at
least $1,113,583 directly to A&A Coastal's subcontractors and
materialmen. This is more than $123,605 in excess of the
$989,978 that A&A Coastal alleges before applying offsets.
Additionally, the Covanta Tampa Debtors paid substantial sums in
costs and attorney's fees in settling the claims of A&A Coastal's
subcontractors.
The Covanta Tampa Debtors also dispute Claim No. 4591 to the
extent that A&A Coastal overstates the amounts owed to it under
the Subcontract. A&A Coastal erroneously claims that the Covanta
Tampa Debtors owed A&A Coastal $774,830. In fact, the Debtors
owed A&A Coastal substantially less.
A&A Coastal improperly claims that the Debtors owed $215,148 for
work it performed in August and September 2002, after the A&A
Subcontract was terminated. During August and September 2002,
A&A Coastal performed work on the Facility for Vogel Brothers,
not for the Covanta Tampa Debtors. The invoice that A&A Coastal
attaches to Claim No. 4591 must, therefore, be directed to Vogel
Brothers. Because the A&A Subcontract had been terminated, A&A
Coastal and the Covanta Tampa Debtors had no contractual
relationship.
The Covanta Tampa Debtors believe they are entitled to an even
larger reimbursement from A&A Coastal.
Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
its creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No.
58; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CREDIT SUISSE: Fitch Takes Ser. 1995-M1 Ratings Off Negative Watch
------------------------------------------------------------------
Fitch Ratings removes Credit Suisse First Boston Mortgage
Securities Corporation's multifamily mortgage pass-through
certificates, series 1995-M1, class C, D, E, F-1, and F-2 from
Rating Watch Negative. In addition Fitch affirms the following
classes:
--$36.9 million class A at 'AAA';
--$5.5 million class B at 'AA';
--$7.8 million class C at 'A';
--$2.8 million class D at 'BBB-';
--$5.1 million class E at 'B+';
--Interest only class AX at 'AAA'.
The $1.5 million class F-1 and $1.2 million class F-2 remain
'CCC'.
Fitch does not rate the $192,136 class G-1 certificates. Class G-
2, also not rated by Fitch, has been reduced to zero due to
realized losses.
The removal of Rating Watch Negative is a result of interest
shortfalls which have been repaid to classes C, D and E. F-1 and
F-2 continue to experience interest shortfalls.
The rating affirmations are the result of paydown. Fitch has
concerns pertaining to the borrowers' ability to meet debt service
obligations upon the expiration of their Low Income Housing Tax
Credits.
As of the May 2004 distribution report the transaction balance has
decreased 20% to $60.9 million from $77.9 million at issuance.
Twenty of the transactions 28 original loans remain outstanding.
There are no delinquent or specially serviced loans.
GMACCM, as master servicer, collected year-end 2003 operating
statements for approximately 89% of the pool. The weighted average
debt service coverage ratio has declined to 1.19 times (x) as of
YE 2003 from 1.33x YE 2002.
The transaction is composed of Low Income Housing Tax Credits
(LIHTC) properties. According to an internal analysis, all of the
tax credits that have not been paid will be paid in full within
the next six months. Tax credits are earned over 15 years and paid
out over 10 years. Fitch is concerned that the borrowers will have
difficulty funding debt service without the tax credits.
The transaction's structure is such that losses are absorbed by
classes depending on the originator of the disposed loan. Dynex
originated loans are absorbed first by class G-2, then G-1,
followed by F-2 and F-1. CBA originated loans however are first
absorbed by class G-1, then G-2, followed by F-1 and F-2.
Hypothetical stress scenarios were applied to the trust, where
loans that concerned Fitch as having the potential to become
problematic were assumed to default. Even under these stress
scenarios, the resulting subordination levels remain sufficient to
affirm the current ratings.
CRESCENT OPERATING: Plan Confirmation Hearing Set for Monday
------------------------------------------------------------
Crescent Operating, Inc. (Pink Sheets:COPIQ) announced that a
hearing has been set for 2:30 P.M., local time, on Monday, June
21, 2004, for the confirmation of its plan of reorganization under
the United States Bankruptcy Code. The hearing will be held at the
United States Bankruptcy Court, Eldon B. Mahon U.S. Courthouse,
501 W. Tenth Street, Fort Worth, Texas, Judge Michael Lynn
presiding. Under the plan of reorganization the stock transfer
books will be closed upon entry of the confirmation order, which
is expected to occur on or soon after June 21, 2004. Under the
plan of reorganization, only those persons who own stock of
Crescent Operating, Inc. on the day on which the confirmation
order is entered will have the right to participate in any
distribution to stockholders of Crescent Operating pursuant to the
plan of reorganization.
Crescent Operating is a management company which owns an interest
in a temperature controlled logistics operating company. It has
been a debtor-in-possession in proceedings under the United States
Bankruptcy Code since March 10, 2003.
DAN RIVER: U.S. Trustee Amends Official Creditors' Committee
------------------------------------------------------------
Felicia S. Turner, the United States Trustee for Region 21 amended
the membership of the Official Committee of Unsecured Creditors
appointed in Dan River, Inc.'s Chapter 11 cases, following
Progressive Screen Engraving Inc.'s resignation. The Creditors'
Committee is now composed of six members:
1. L.C. Capital Master Fund, Ltd.
c/o Lampe, Conway & Company LLC
680 Fifth Avenue
Suite 1202
New York, NY 10019-5429
Phone: (212) 581-0502 Fax: (212) 581-8999
E-Mail: conway@lampeconway.com
2. Wellman, Inc.
Attention: Werner E. Wolckehhauer
5146 Parkway Plaza Blvd.
Charlotte, N.C. 28217
Phone: (704) 357-2040 Fax: (704) 424-2040
E-Mail: Werner.Wolckenhauer@WellmanInc.com
3. HSBC Bank, USA
Attention: Sandra E. Horwitz, Vice President
10 East 40th Street
14th Floor
New York, NY 10016
Phone: (212) 525-1358 Fax: (212) 525-1300
E-Mail: sandra.e.horwitz@us.hsbc.com
4. Singer Children's Management Trust & Affiliates
Attention: Gary Singer and/or Philip Mandelbaum
560 Sylvan Avenue
Englewood Cliggs, NJ 07632
Phone: (201) 568-4400 Fax: (201) 568-4577
E-Mail: gary@purel.com
5. Sandler Capital Management
Attention: Douglas E. Schimmel
767 Fifth Avenue
New York, NY 10153
Phone: (212) 754-8115 Fax: (212) 754-8166
E-Mail: doug@sandlercap.com
6. Teijan Akra, USA
Attention: Grover Smith, Vice President
Sales & Marketing
5950 Fairview Road, Suite 416
Charlotte, NC 28210
Phone: (704) 554-6588 Fax: (888) 828-2572
E-Mail: gsmith@akra.com
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in Danville, Virginia, Dan River Inc.
-- http://www.danriver.com/-- is a designer, manufacturer and and
marketer of textile products for the home fashions, apparel
fabrics and industrial markets. The Company filed for chapter 11
protection on March 31, 2004 (Bankr. N.D. Ga. Case No.
04-10990). James A. Pardo, Jr., Esq., at King & Spalding
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$441,800,000 in total assets and $371,800,000 in total debts.
DAN RIVER: Creditors Must File Claims by August 10, 2004
--------------------------------------------------------
The United States Bankruptcy Court for the Northern District of
Georgia, Newnan Division, set August 10, 2004, as the deadline for
all creditors of:
* Dan River Inc.;
* Dan River International Ltd.;
* The Bibb Company LLC; and
* Dan River Factory Stores, Inc.
to file proofs of claim on account of debts arising prior to
March 31, 2004.
Creditors must file written proofs of claim and claim forms must
be delivered to:
If sent by mail:
Dan River Inc.
c/o BMC
P.O. Box 949
El Segundo, California 90245-0949
If sent by courier or hand delivery:
Dan River, Inc.
c/o BMC
1330 E. Franklin Avenue
El Segundo, California 90245
All governmental units that assert a claim against the Debtors
have until September 27, 2004 to file their proofs of claim.
Six categories of claims are exempted from the Bar Date:
(a) claims already properly filed;
(b) claims scheduled in the right amount and not disputed,
contingent or unliquidated;
(c) claims previously allowed by the Bankruptcy Court;
(d) claims of director, officer, or employee of the Debtors
that may have claims against the Debtors for
indemnification, contribution, subrogation, or
reimbursement;
(e) claims in respect of principal and accrued interest
arising under the Debtors' issuance of the 12-3/4%
Senior Notes due 2009; and
(f) administrative expense claims.
Headquartered in Danville, Virginia, Dan River Inc.
-- http://www.danriver.com/-- is a designer, manufacturer and and
marketer of textile products for the home fashions, apparel
fabrics and industrial markets. The Company filed for chapter 11
protection on March 31, 2004 (Bankr. N.D. Ga. Case No.
04-10990). James A. Pardo, Jr., Esq., at King & Spalding
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$441,800,000 in total assets and $371,800,000 in total debts.
DAS INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: D.A.S. International Medical Marketing, Ltd.
10921 Wilshire Boulevard Suite 1114
Los Angeles, California 90024
Bankruptcy Case No.: 04-22972
Chapter 11 Petition Date: June 10, 2004
Court: Central District of California (Los Angeles)
Judge: Alan M. Ahart
Debtor's Counsel: Stephanie L. Krafchak, Esq.
Kradchak & Associates
2029 Century Park East Suite 900
Century City, CA 90067
Tel: 310-772-0034
Total Assets: $10 Million to $50 Million
Total Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Aetna Life Insurance Co. & Judgment $2,145,279
Aetna U.S. Healthcare
c/o CT Corporation
Seventh St., Los Angeles
CA 90017
United Health Group, Inc. Judgment $649,331
dba United Health Group
P.O. Box 1459
Minneapolis, MN 554450
CIGNA/Connecticut General Judgment $113,846
Life Assurance Society of
the U.S. & CIGNA Employee
Benefit Services, Inc.
Premium Financing Trade Debt $69,269
Specialists (Malpractice
Insurance
American Medical Systems Inc Trade Debt $39,467
McKesson General Medical Trade Debt $37,124
Inamed Trade Debt $28,565
Humana, Inc. Judgment $26,916
WW Westwood Trade Debt $19,093
Medline Industries, Inc. Trade Debt $11,774
Bluecross of California Trade Debt $7,837
Employees Large Group
Priority Healthcare Trade Debt $7,747
Otto Stahlworth MD Trade Debt $7,550
Vijay A. Gynn, MD Trade Debt $6,700
Xerox Trade Debt $6,370
Richard Nigro, MD Trade Debt $3,650
Littell Industries / Airgas Trade Debt $3,219
West
Emcor Service Trade Debt $2,965
Medice Professional Linen Trade Debt $2,907
Service
Southland Surgical Trade Debt $2,903
Associates
DB COMPANIES: First Creditors' Meeting Slated for July 12
---------------------------------------------------------
The United States Trustee will convene a meeting of DB Companies,
Inc.'s creditors at 10:00 a.m., on July 12, 2004 in Room 2112 at
J. Caleb Boggs Federal Building, 2nd Floor, 844 King Street,
Wilmington, Delaware 19801. This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Pawtucket, Rhode Island, DB Companies, Inc. --
http://www.dbmarts.com/-- operates and franchises a regional
Chain of DB Mart convenience stores in Connecticut, Massachusetts,
Rhode Island, and the Hudson Valley region of New York. The
Company filed for chapter 11 protection on June 2, 2004 (Bankr.
Del. Case No. 04-11618). William E. Chipman Jr., Esq., at
Greenberg Traurig, LLP represents the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed estimated assets of over $50 million
and debts of approximately $65 million.
DECORAH LLC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Decorah LLC
2605 14th Court
Adams, Wisconsin 53910
Bankruptcy Case No.: 04-14328
Chapter 11 Petition Date: June 14, 2004
Court: Western District of Wisconsin (Madison)
Judge: Robert D. Martin
Debtor's Counsel: Timothy J. Peyton, Esq.
Suite 202, 634 West Main Street
Madison, WI 53703
Tel: 608-257-5424
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
The Debtor did not file a list of its 20-largest creditors.
DEEP WELL: BMA Securities Files OTC BB Stock Listing Application
----------------------------------------------------------------
Deep Well Oil & Gas, Inc., a Nevada Corporation, announced that on
June 16, 2004, BMA Securities, Inc. of Rolling Hills Estates,
California, has completed and submitted a Form 211 pursuant to
15c2-11 to NASD Regulation, Inc.'s OTC Compliance Unit on behalf
of the Company for consideration whereby the Company's common
stock can become quoted on the OTC Bulletin Board. The
Company is a Securities and Exchange Commission reporting company.
The Company continues to focus on its new business plan to
commence operations as an oil and gas exploration and development
company with special emphasis on heavy oil and gas exploration
activities in Northern Alberta, Canada.
Deep Well Oil & Gas, Inc. -- whose total stockholders' deficit
tops $44,440 at March 31, 2004 -- and its former subsidiaries,
were engaged in the manufacture and distribution of standard and
custom precision mechanical assemblies and components throughout
the United States.
DEVINE ENTERTAINMENT: Posts CDN$2.3 Million Deficit at March 31
---------------------------------------------------------------
Devine Entertainment Corporation (CUB: DVNN, NASD OTC PK: DVNNF)
reported results for the year ended December 31, 2003 and the
first quarter ended March 31, 2004 (all amounts in Canadian
dollars).
Devine's 2003 losses were reduced by approximately 50% as compared
with 2002 losses. The Company approached break-even on a cash
basis after taking into account the one-time write-down of the
Company's development slate and the non-cash amortization of its
library sales. After the $328,145 write-down of the Company's
development slate, Devine's basic and fully diluted loss for 2003
was $851,146 or $0.06 per share as compared to the 2002 loss of
$1,620,297, or $0.12 per share. Revenues amounted to $721,241 for
2003, a decrease of 21% from $917,398 revenues for 2002. The
absence of a broadcast sale for the Company's library in 2003,
which had accounted for $180,000 or almost 20% of library revenues
in 2002, comprised the majority of the $196,157
drop in revenues.
Devine's turnaround continued in the 2004 first quarter with
results approaching break-even. Net loss for the quarter was
reduced to $49,152 as compared to a net loss of $99,425, or $0.01
per share, for the 2003 first quarter. The Company's 2004 first
quarter revenues were down 21% to $129,697 from the $165,530
recorded for the same period in 2003.
The resumption of new production activity in the third quarter of
2003, along with the successful financing of Devine's first
feature film for theatrical release, Bailey's Billion$, marked an
important turnaround event for the Company. In post-production
through the end of 2004 first quarter Bailey's Billion$, budgeted
at $11.4 million favorably affected the Company's cash flow,
operations and margins and played an important part in
significantly reducing losses. The delivery of Bailey's Billion$
to distributors, currently on budget and schedule for the 2004
second quarter, is expected to positively impact revenues and
profitability in 2004.
As previously announced, Devine recently completed a $516,000
private placement. The proceeds should assist the Company in its
efforts to settle and restructure its long-term debt and improve
its balance sheet. Negotiations along these lines progressed
significantly in the first quarter of 2004. Settlements have been
agreed to in principle and the Company expects to conclude
settlements with its major debt-holders in the second quarter of
2004. The resulting restructuring of the Company's debt should
significantly enhance the Company's income and balance sheet in
2004.
At March 31, 2004, Devine Entertainment's balance sheet shows a
total shareholders' deficit of $2,285,474 compared to a deficit of
$2,236,322 at December 31, 2003.
Five-time Emmy Award-winning Devine Entertainment Corporation
develops, produces and distributes children's and family
entertainment for the theatrical motion picture, television and
Video/DVD marketplace worldwide. Its diverse film series on
landmark composers, inventors and artists are critically acclaimed
and broadcast in over 50 countries. Devine's first feature film
for theatrical release, Bailey's Billion$, is slated for release
in 2004. Headquartered in Toronto, the Company's common shares
trade under the symbol DVNN on the Canadian Unlisted board, and
NASD OTC PK market in the U.S. under the symbol DVNNF, the
Company's corporate website is http://www.devine-ent.com/
DEX MEDIA: Fitch Affirms Subsidiaries' Low-B Senior Debt Ratings
----------------------------------------------------------------
Fitch Ratings has affirmed the following Dex Media's subsidiaries,
Dex Media East LLC (DXME) and Dex Media West LLC (DXMW).
Specifically, Fitch has affirmed the following DXME ratings:
DXME
--$1.1 billion senior secured credit facility 'BB-';
--$450 million senior unsecured notes due 2009 'B';
--$525 million senior subordinated notes due 2012 'B-'.
DXMW
--$2.1 billion senior secured credit facility 'BB-';
--$385 million senior unsecured notes due 2010 'B';
--$780 million senior subordinated notes due 2013 'B-'.
In addition, Fitch has assigned a 'CCC+' rating to the holding
company's, Dex Media Inc., $500 million 8% notes due 2013 and its
$750 million 9% aggregate principal discount notes due 2013, which
has a current accreted value of $512 million. Approximately $6.3
billion of debt is affected by Fitch's actions. The Rating Outlook
is Stable.
Fitch's ratings recognize the high degree of leverage, which
resulted from the acquisition of DXMW and DXME from Qwest
Communications completed on Nov. 8, 2002 and on Sept. 9, 2003,
respectively. The senior unsecured and senior subordinated ratings
mainly reflect weak credit metrics and, to a lesser extent, the
amount of secured debt at DXME and DXMW, which currently
represents 47% and 48% of their respective capital structures. The
'BB-' ratings on the DXME and DXMW bank facilities reflect their
secured position. While the operating businesses lack significant
tangible assets, intangibles include valuable customer lists and
non-compete agreements.
The ratings also reflect competition from independent directory
publishers that compete on price and usage substitution with
internet directories. Long-term risks relate to potential changes
in the buying patterns of advertisers or a shift in the
effectiveness of yellow page advertising relative to other media,
as well as the success of new product innovations launched by the
company.
These risks are offset by the strong market position of each
incumbent directory publishers within its service territories, the
stability and consistency of their revenue streams, strong
operating margins, and solid free cash flow generation. Revenue
stability at DXME and DXMW is supported by a high advertiser
retention rate (91%) and the directory industry's modest
sensitivity to cyclical economic conditions. The subsidiary
businesses also provide good geographic and customer diversity.
Ongoing capital expenditures to support its business are expected
to remain low.
Dex's 'CCC+' rating reflects the structural subordination of debt
at the holding company, which has no operating assets and relies
on dividends from these subsidiaries for debt service. Through
various debt offerings from November 2003 through March 2004, Dex
issued debt of approximately $1 billion, with proceeds used to pay
dividends to its equity sponsors.
Pursuant to a proposed $1.5 billion IPO of Dex shares, the company
plans to reduce debt at the subsidiaries with a portion of the IPO
proceeds. Dex intends to reduce debt by $437 million ($174 million
of subsidiary debt at DXME and $263 million of subsidiary debt at
DXMW). Consolidated total debt/EBITDA leverage (pro forma for
acquisition effects and IPO transaction while excluding effects of
purchase accounting) during the latest twelve months ended March
31, 2004 is anticipated to decline to 6.4 times (x) from 6.8x.
Leverage at DXME is anticipated to decline to 4.7x from 5.2x and
at DXMW to decline to 5.6x from 6.1x, pro forma for the
transaction.
Dex also intends to redeem the Dex Media, Inc. series A preferred
stock for $127 million, with a portion of the IPO proceeds. In
addition, Fitch expects a portion of the IPO proceeds to be
distributed to the company's sponsor group, which to date has
recouped $1 billion out of a total $1.6 billion investment in DXME
and DXMW. Dex's ongoing financial policy will be closely
monitored, as the company has announced plans to make common stock
dividend payments when permissible. However, the terms of the
subsidiaries' credit facilities and the indentures governing the
unsecured subsidiary debt significantly restrict subsidiary
dividend payments for purposes other than satisfying Dex interest
expense.
Fitch expects the available balances under the revolving credit
facilities, combined with operating cash flow, to provide adequate
liquidity. At March 31, 2004, DXME and DXMW each had $100 million
available under its respective revolving credit facility.
Furthermore, liquidity is enhanced by free cash flow generation at
DXME and DXMW during 2004. At March 31, 2004, maturities were
manageable with $76 million of short-term debt at DXME and $33
million of short-term debt at DXMW. Cash flow available for
dividends, after mandatory subsidiary debt amortization, is
expected to remain in excess of the $40 million of interest
expense on Dex Media Inc.'s $500 million 8% senior notes due 2013.
EL PASO CORP: Banks Give Until August 15 to File Financial Reports
------------------------------------------------------------------
El Paso Corporation (NYSE: EP) announced that it has received
additional waivers on its $3-billion revolving credit facility and
certain other financings. These waivers provide El Paso with an
extension until August 15, 2004 to file its 2003 Form 10-K and
first quarter 2004 Form 10-Q. The waivers provide for a 29-day
grace period to file financial statements in the event that El
Paso or any of its significant subsidiaries receives a notice of
default on any debt or guarantee of debt that in aggregate exceeds
$100 million.
About the Company
El Paso Corporation provides natural gas and related energy
products in a safe, efficient, dependable manner. The company owns
North America's largest natural gas pipeline system and one of
North America's largest independent natural gas producers.
As previously reported, Standard & Poor's Ratings Services lowered
its corporate credit rating on natural gas pipeline and production
company El Paso Corp. to 'B-' from 'B' to reflect a larger-than-
expected write-down of the company's oil and natural gas reserves.
The outlook remains negative.
For more information, visit http://www.elpaso.com/
ENDURANCE SPECIALTY: S&P Rates Preferred Stock at BB+
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB' counterparty
credit rating to Endurance Specialty Holdings Ltd. and its
preliminary 'BBB' senior debt, 'BBB-' subordinated debt, and 'BB+'
preferred stock ratings to the company's $1.8 billion universal
shelf registration.
Standard & Poor's also said that it affirmed its 'A-' counterparty
credit and financial strength ratings on Endurance Specialty
Insurance Ltd., Endurance Worldwide Insurance Ltd., and Endurance
Reinsurance Corp. of America.
The outlook on all these companies is stable.
"The ratings on Endurance are based on its strong competitive
position, which is supported by a diversified business platform,"
noted Standard & Poor's credit analyst Damien Magarelli. "In
addition, Endurance maintains strong capital adequacy and strong
operating performance." Offsetting these positive factors are
concerns about Endurance's exposure to catastrophes and minimal
reinsurance protections. Endurance also is a relatively new
operation, and management has not been tested through
difficult market cycles.
The shelf registration allocates $500 million for potential
securities issuance and registers 38,069,699 common shares
currently owned by founding investors in Endurance.
The stable outlook is based on Standard & Poor's expectation that
Endurance will maintain strong earnings. Capital adequacy is
expected to remain strong. In addition, the company is expected to
exhibit the risk-management skills and underwriting discipline to
appropriately control the volume and profitability of business in
a softening market, but this will be proven over the next few
years.
Endurance is viewed as having a strong competitive position based
on its market position, scale, and diversified operations.
Endurance ranks in the Top 10 in the Bermuda insurance market
based on total equity. The company's ranking and capital base
establish its market presence and mitigate concerns about its
status as a new operation. Endurance also maintains
diversification by sector, location, and product line.
ENRON CORPORATION: Court Approves Eleven Settlement Agreements
--------------------------------------------------------------
Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy
Procedure, the Enron Corporation Debtors sought and obtained Court
approval of 11 settlement agreements they entered into separately
with:
-- Tyco Healthcare Group, LP;
-- Ridge Tool Company;
-- Quebecor World (USA), Inc., and Quebecor World Printing
(USA) Corporation;
-- Lyons Magnus, Inc.;
-- Novellus Systems, Inc.;
-- Alamo Stone Supplies, LLC;
-- Dean Foods Company and Purity Dairies, Inc.;
-- 1950 Stemmons Asset Acquisition I, LP;
-- Owens-Illinois, Inc.;
-- FMAC; and
-- Staten Island Advance, The Newark Star Ledger, Syracuse
Herald American and The Times of Trenton Publishing Co.
Edward A. Smith, Esq., at Cadwalader, Wickersham & Taft, in New
York, relates that:
(a) Enron Energy Services Operations, Inc., and Tyco entered
into the Energy Management Agreement, dated September 1,
1999. Enron Corporation executed a Guaranty Agreement
for Tyco's benefit. On February 28, 2002, the Court
authorized the rejection of the Tyco Agreement. Pursuant
to the Agreement, EESO invoiced Tyco $2,600,000 for
prepetition services and about $60,000 for postpetition
services. Tyco, on the other hand, filed a rejection
claim for about $22,700,000;
(b) On October 7, 1999, EESO and Ridge Tool entered into an
Energy Management Agreement. On September 1, 1997, Enron
Power Marketing, Inc., and Ridge Tool entered into an
Electric Energy Sale Option Agreement. The Management
Agreement was rejected by a Court order while the Option
Agreement was terminated consensually by the parties.
Pursuant to the Management Agreement, EESO has invoiced
Ridge Tool $407,836 for prepetition services and $72,099
for postpetition services;
(c) The Debtors and the Quebecor Entities were parties to one
or more prepetition transactions for, inter alia, the
sale of power, natural gas, pulp, paper and wood
products, as well as certain energy management services.
In this regard, Enron issued a guaranty agreement in
favor of Quebecor Entities, dated Sept 28, 2001.
According to the Debtors' books and records, there remain
certain amounts due and owing to the estates with respect
to the Contracts;
(d) Enron Energy Services, Inc., and Lyons were parties to
one or more prepetition transactions for the sale of
power and gas;
(e) Enron Energy Marketing Corporation and Novellus were
parties to prepetition transactions under which EEMC
agreed to supply power. On September 3, 2002, EEMC
entered into a Settlement Agreement under which EEMC is
entitled to receive payment from Novellus for services
rendered under the Contracts. Novellus filed Claim No.
8833 against Pacific Gas & Electric Company for
$4,523,842 in the United States Bankruptcy Court for the
Northern District of California;
(f) Enron Freight Markets Corporation and Alamo were parties
to one or more prepetition transactions wherein EFMC
provided freight services to Alamo. According to the
Debtors' books and records, there remain certain amounts
outstanding with respect to the Contracts;
(g) The Debtors and the Dean Foods Entities were parties to
certain prepetition transactions pursuant to which the
Debtors provided electricity and natural gas, as well as
freight and energy management services to the Dean Foods
Entities;
(h) EESO and Stemmons were parties to a prepetition
transaction wherein EESO provided energy and facilities
maintenance services to Stemmons. Enron Corp. issued a
guarantee in favor of Stemmons;
(i) EESI and Owens were parties to a Commodity Management
Agreement prior to the Petition Date;
(j) EFMC and FMAC were parties to one or more prepetition
transactions pursuant to which certain invoices were
issued by EFM and had remained outstanding; and
(k) Garden State Power Company, LLC, and the Staten Entities
were parties to one or more prepetition transactions
pursuant to which certain invoices were issued and remain
outstanding.
After discussions between the Parties, they have agreed to enter
into separate Settlement Agreements wherein:
(a) Tyco withdraws its Proofs of Claim filed against the
Debtors;
(b) Ridge Tool will pay EESO and EPMI the invoiced amounts;
(c) the Quebecor Entities will pay $4,500,000 to the Debtors;
(d) Lyons will pay $723,400 to EESI representing the
True-up Amounts due and owing to EESI;
(e) Novellus will assign all of its rights under Claim No.
8833 and will pay $83,430 to EEMC;
(f) Alamo will pay $6,090 to EFMC;
(g) the Dean Foods Entities will pay $8,350,000 to the
Debtors;
(h) Stemmons will pay $450,000 to EESO;
(i) Owens will pay EESI $3,050,000 and will withdraw all
claims it filed against EESI in connection with the
Contract;
(j) FMAC will pay $3,290 to EFMC; and
(k) the Staten Entities will pay $255,250 to Garden State.
The parties also mutually release each other from all claims,
obligations and liabilities under the settled Agreements.
Mr. Smith contends that the Settlement Agreements are warranted
because:
(a) they will result in a substantial payment to the Debtors'
estates; and
(b) they will avoid future disputes and litigations
concerning the Contracts as the parties will release one
another from claims relating to the Contracts. (Enron
Bankruptcy News, Issue No. 112; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENRON CORP: Inks Stipulation Resolving Disputes with AEP Parties
----------------------------------------------------------------
A series of disputes exist between Enron Corporation
and the AEP Parties -- American Electric Power Company, Inc.,
American Electric Power Services Corporation, AEP Energy Services,
Inc., AEP Energy Services Ltd., AEP Desert Sky LP, LLC, AEP Desert
Sky GP, LLC, Houston Pipe Line Company, LP, and HPL Services
Company, LP -- with respect to Project Agreements, the Lake Benton
Project and the Claims the AEP Parties filed.
To resolve the disputes, the Parties stipulate that:
(a) Lake Benton Power Associates, LLC, will have an allowed:
-- Class 63 General Unsecured Claim for $7,000,000 against
the Enron Wind Development, LLC, estate;
-- Class 157 General Unsecured Claim for $525,000 against
the Enron Wind Lake Benton, LLC, estate; and
-- Class 185 Enron Guaranty Claim for $25,000 against the
Enron Corporation Estate;
(b) Lake Benton Power Partners, LLC, will have an allowed:
-- Class 73 General Unsecured Claim for $41,800,000
against the Zond Minnesota Construction Company, LLC,
estate;
-- Class 47 General Unsecured Claim for $4,600,000
against the Enron Wind Maintenance, LLC, estate;
-- Class 186 Wind Guaranty Claim for $40,600,000 against
the Enron Wind Corporation estate; and
-- Class 185 Enron Guaranty Claim for $14,200,000 against
the Enron Estate;
(c) Storm Lake II Power Associates, LLC, will have an allowed:
-- Class 154 Claim for $525,000 against the Enron Wind
Storm Lake II, LLC, estate; and
-- Class 185 Enron Guaranty Claim for $25,000 against the
Enron Estate;
(d) Storm Lake Power Partners II, LLC, will have an allowed:
-- Class 48 Unsecured Claim for $53,800 against the Enron
Wind Constructors Corporation estate; and
-- Class 47 General Unsecured Claim for $9,900,000
against the EWM estate;
-- Class 186 Wind Guaranty Claim for $56,100,000 against
the Wind estate; and
-- Class 185 Enron Guaranty Claim for $21,200,000 against
the Enron estate;
(e) None of the Claims filed by Fortis Bank S.A./N.V., as the
lenders' agent to certain financing agreements dated
December 24, 1998, will be allowed against any of the
Debtors;
(f) Under no circumstances will the AEP Parties obtain a
recovery from the Debtors in excess of $54,000,000 in the
aggregate, in relation to the Lake Benton Project,
provided, however, that nothing in the Stipulation will
limit, reduce or prejudice the AEP Parties' recovery in
relation to the Storm Lake II Project;
(g) Upon acceptance of the Plan, the AEP Parties will be
entitled to receive the benefit of the Cash Election
irrespective of the vote of any other creditor on the
Plan or the acceptance of the Plan by any class of
creditors; and
(h) The AEP Parties are deemed to have withdrawn the Plan
Objection, voted its Allowed Claim in favor of accepting
the Plan and exercised the Cash Election.
The Court approves the parties' stipulation. (Enron Bankruptcy
News, Issue No. 112; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
ENRON: Panel Sues 7 Workers to Recover $8.6M Preferential Payments
------------------------------------------------------------------
Within one year prior to the Bankruptcy Petition Date, one or more
of the Enron Corporation Debtors made, or caused to be made, these
transfers to seven employees:
Employee Amount
-------- ------
James M. Bannantine $862,395
Rodney Gray 680,000
Robert J. Hermann 400,000
David Huag 4,873,961
Executor of the Estate of Lawrence Izzo 1,500,000
Joseph G. Kishkill 120,000
Mark E. Koenig 150,000
-----------
TOTAL $8,586,356
Susheel Kirpalani, Esq., at Milbank, Tweed, Hadley & McCloy, LLP,
in New York, relates that pursuant to Section 547(b) of the
Bankruptcy Code, the Transfers are avoidable because the
Transfers:
(a) were made within one year prior to the Petition Date,
wherein the Debtors were considered to be insolvent;
(b) constitute transfers of interests of the Debtors'
property;
(c) were made to, or for the benefit of, a creditor;
(d) were made on account of an antecedent debt owed to the
creditor; and
(e) enabled the Employees to receive more than they would
have received if:
-- these cases were administered under Chapter 7 of the
Bankruptcy Code;
-- the Transfers were not made; and
-- the Employees received payment of the debt to the
extent provided by the Bankruptcy Code.
As avoidable preferential transfers, Mr. Kirpalani contends that
the Transfers are recoverable under the purview of Section
550(a).
In addition, Mr. Kirpalani tells the Court that the Transfers are
also fraudulent transfers in accordance with Section 548(a)(1)(B)
since the Debtors received less than reasonably equivalent value
in exchange for some or all of the Transfers.
In the alternative, Mr. Kirpalani asserts that the Transfers
should be considered fraudulent transfers that may be avoided and
recovered pursuant to Sections 554 and 550 of the Bankruptcy
Code, Sections 270 to 281 of the New York Debtor and Creditor Law
or other applicable law on these additional grounds:
-- As a direct and proximate result of the Transfers, the
Debtors and their creditors suffered losses amounting to
at least the value of the Transfers; and
-- At the time of the Transfers, there were creditors
holding unsecured claims and there were insufficient
assets to pay the Debtors' liabilities in full.
Accordingly, the Official Committee of Unsecured Creditors, on
the Debtors' behalf, seeks a Court judgment:
(a) declaring the avoidance and setting aside of the
Transfers pursuant to Section 547(b);
(b) in the alternative, declaring the avoidance and setting
aside of the Transfers pursuant to Section 548(a)(1)(B);
(c) in the alternative, declaring the avoidance and setting
aside of the Transfers pursuant to Bankruptcy Code
Section 544, New York Debtor and Creditor Law Sections
270-281 or other applicable law;
(d) awarding to the Committee an amount equal to the
Transfers and directing the Employees to immediately pay
the Transfers pursuant to Section 550(a), together with
interest from the date of the Transfers; and
(e) awarding to the Committee its attorneys' fees, costs and
other expenses incurred. (Enron Bankruptcy News, Issue No.
112; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ETHYL CORP: Plans to Close Holding Company Transaction Today
------------------------------------------------------------
Ethyl Corporation (NYSE: EY) announced its intention to complete
the formation of its new holding company, NewMarket Corporation,
on June 18, 2004.
The Company intends that the stock of NewMarket Corporation will
begin trading on the New York Stock Exchange on Monday, June 21,
2004 under the trading symbol "NEU". The Company will continue
trading under the symbol "EY" until the close of business on
Friday, June 18, 2004. Upon closing of the transaction, each share
of Ethyl Corporation stock will automatically be converted into
one share of NewMarket Corporation stock.
* * *
As previously reported, Standard & Poor's Rating Services revised
its outlook on Ethyl Corp. to positive from stable as a result of
the company's continued debt reduction, favorable business
prospects and an improved financial profile. At the same time,
Standard & Poor's affirmed its 'B+/Positive/--' corporate credit
rating and other ratings on the company. Ethyl, based in Richmond,
Virginia, is a global manufacturer of fuel and lubricant additive
products and has about $222 million of debt outstanding.
The ratings reflect Ethyl Corp.'s below-average business profile
that reflects the highly competitive nature of the global
petroleum additives industry, exposure to volatile raw material
costs and the vagaries of economic cycles, offset by an improved
financial profile following the company's recent refinancing and
continued debt reduction efforts. Petroleum additives are
specialty chemicals that improve the performance of fuels,
automotive crankcase oils, transmission and hydraulic fluids,
and industrial engine oils.
FEDERAL-MOGUL: Wants To Extend Removal Period Through October 1
---------------------------------------------------------------
The Federal-Mogul Corporation Debtors and Creditors Committee
jointly ask the Court to extend the time by which the Debtors may
file notices to remove civil actions pending as of the Petition
Date, through and including October 1, 2004.
The Debtors continue to review which actions might be suitable
for removal. With respect to actions unrelated asbestos, their
analysis is largely complete.
According to James E. O'Neill, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub, P.C., in Wilmington, Delaware, the
extension will preserve whatever ability the Debtors may have to
remove claims against them. Nevertheless, the rights of the
Debtors' adversaries will not be prejudiced by the extension.
Any party to prepetition actions that is removed may seek to have
it remanded to the state court from which the action was removed
pursuant to Section 1452(b) of the Judiciary Procedures Code.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- <http://www.federal-mogul.com/>http://www.federal-mogul.com/--
is one of the world's largest automotive parts companies with
worldwide revenue of some $6 billion. The Company filed for
chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-
10582). Lawrence J. Nyhan, Esq., James F. Conlan, Esq., and Kevin
T. Lantry, Esq., at Sidley Austin Brown & Wood and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from its creditors, they listed
$10.15 billion in assets and $8.86 billion in liabilities.
(Federal-Mogul Bankruptcy News, Issue No. 57; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FIBERMARK: Secures Lease Decision Deadline through September 30
---------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of Vermont,
FiberMark, Inc., and its debtor-affiliates obtained an extension
of their lease decision period. The Court gives the Debtors until
September 30, 2004 to determine whether to assume, assume and
assign, or reject their unexpired nonresidential real property
leases.
Headquartered in Brattleboro, Vermont, FiberMark, Inc.
-- http://www.fibermark.com/-- produces filter media for
transportation applications and vacuum cleaning; cover stocks and
cover materials for books, graphic design, and office supplies and
base materials for specialty tapes, wallcoverings and sandpaper.
The Company filed for chapter 11 protection on March 30, 2004
(Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D. J.
Baker, Esq., David M. Turetsky, Esq., Rosalie Walker Gray, Esq.,
at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors
in their restructuring efforts. When the Debtors filed for
protection from its creditors, they listed $329,600,000 in total
assets and $405,700,000 in total debts.
FIBERMARK: Hiring Skadden Arps as Bankruptcy Attorneys
------------------------------------------------------
FiberMark, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Vermont for permission to employ
Skadden, Arps, Slate, Meagher & Flom LLP as their attorneys.
The Debtors selected Skadden Arps because of the firm's expertise
in the field of debtors' and creditors' rights and business
reorganizations under chapter 11 of the Bankruptcy Code.
Moreover, since the Firm's retention by the Debtors, Skadden Arps
has become intimately familiar with the Debtors' operations,
financial condition and legal affairs.
Skadden Arps will:
a) advise the Debtors with respect to their powers and duties
as debtors and debtors-in-possession in the continued
management and operation of their businesses and
properties;
b) attend meetings and negotiate with representatives of
creditors and other parties in interest and advise and
consult on the conduct of the cases, including all of the
legal and administrative requirements of operating in
chapter 11;
c) take all necessary actions to protect and preserve the
Debtors' estates, including the prosecution of actions on
their behalf, the defense of any actions commenced against
their estates, negotiations concerning all litigation in
which the Debtors may be involved and objections to claims
filed against the estates;
d) prepare on behalf of the Debtors all motions,
applications, answers, orders, reports and papers
necessary to the administration of the estates;
e) negotiate and prepare on the Debtors' behalf plan(s) of
reorganization, disclosure statement(s) and all related
agreements and/or documents and take any necessary action
on behalf of the Debtors to obtain confirmation of such
plan(s);
f) advise the Debtors in connection with any sale of assets;
g) appear before this Court, any appellate courts, and the
United States Trustee, and protect the interests of the
Debtors' estates before such courts and the United States
Trustee; and
h) perform all other necessary legal services and provide all
other necessary legal advice to the Debtors in connection
with these chapter 11 cases.
Skadden Arps and the Debtors have agreed that the firm's bundled
rate structure will apply to these cases. Presently, the hourly
rates under the bundled rate structure range from
Designation Billing Rate
----------- ------------
partners $520 to $760 per hour
counsel $495 to $630 per hour
associates $250 to $490 per hour
legal assistants and
support staff $85 to $195 per hour
Headquartered in Brattleboro, Vermont, FiberMark, Inc.
-- http://www.fibermark.com/-- produces filter media for
transportation applications and vacuum cleaning; cover stocks and
cover materials for books, graphic design, and office supplies and
base materials for specialty tapes, wallcoverings and sandpaper.
The Company filed for chapter 11 protection on March 30, 2004
(Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D. J.
Baker, Esq., David M. Turetsky, Esq., Rosalie Walker Gray, Esq.,
at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors
in their restructuring efforts. When the Debtors filed for
protection from its creditors, they listed $329,600,000 in total
assets and $405,700,000 in total debts.
FIRST AMERICAN: Completes SNK Holdings & LOGS Fin'l Acquisition
---------------------------------------------------------------
The First American Corporation (NYSE: FAF), the nation's largest
data provider, announced that it has completed its acquisition of
privately held, mortgage default services provider SNK Holdings,
Inc. and its subsidiary operations, including LOGS Financial
Services to create First American National Default Outsourcing
(NDO), a growing component of First American's Mortgage
Information Services group.
As previously announced, the combination of these businesses will
be immediately accretive to First American. The combination of
default servicing operations, technology integration, process
improvements and other synergies, will reduce First American
National Default Outsourcing's annual operating expenses by $5
million within the first 12 months. The acquisition will also
strengthen First American's counter-cyclical revenue base, as the
company will now serve approximately 60 percent of the default
outsourcing market.
Based in Northbrook, Ill., SNK/LOGS is the second largest mortgage
default services provider in the nation. The company has
established the industry's premier system for complete process
outsourcing. With the addition of the LOGS platform, First
American now can offer its lender customers either full- service
onsite default assistance, or complete outsource management of
default operations at a First American NDO support facility.
"The combination of the LOGS platform with the efficiencies
provided by First American's best-in-class default technologies,
VendorScape/CMS, iClear and eDAISY, puts First American in a
position to offer truly comprehensive default management to the
servicing industry," said James C. Frappier, president of First
American Default Management Solutions.
First American National Default Outsourcing has established
headquarters in Lewisville, Texas, and will continue to manage and
direct outsourcing activities from its regional offices in
Milwaukee; Northbrook, Ill.; and Jacksonville, Fla. First American
will also work to maximize service levels by continuing to utilize
its existing attorney/agent network, as well as the LOGS network
of agents nationwide.
The First American Corporation is a Fortune 500 company that
traces its history to 1889. As the nation's largest data provider,
the company supplies businesses and consumers with information
resources in connection with the major economic events of people's
lives, such as getting a job; renting an apartment; buying a car,
house, boat or airplane; securing a mortgage; opening or buying a
business; and planning for retirement. The First American Family
of Companies, many of which command leading market share positions
in their respective industries, operate within six primary
business segments including: Title Insurance and Services,
Specialty Insurance, Mortgage Information, Property Information,
Credit Information and Screening Information. With revenues of
$6.2 billion in 2003, First American has 29,000 employees in
approximately 1,800 offices throughout the United States and
abroad. More information about the company and an archive of its
press releases can be found at http://www.firstam.com/
* * *
As previously reported, Standard & Poor's Ratings Services
affirmed its 'BBB' counterparty credit and senior debt ratings and
'BB+' preferred stock ratings on insurance holding company First
American Corp. (NYSE:FAF). Standard & Poor's also revised its
outlook on all the ratings to positive from stable.
FLEMING COS: Irving & Cavendish Ask Court To End Exclusive Periods
------------------------------------------------------------------
Irving Tissue, Inc., and Cavendish Farms, Inc., represented by
James W. Jennings, III, Esq., at Bellinger & DeWolf, LLP, in San
Antonio, Texas, ask the Court to terminate the Fleming Companies,
Inc. Debtors' exclusive rights to present a plan and solicit its
acceptance. Irving and Cavendish also object to any further
extensions of the Debtors' Exclusive Periods.
Irving and Cavendish recount that the Debtors have held several
auctions to dispose of grocery store-related properties and, in
September 2003, started an auction process for the sale of Core-
Mark International and related entities. The sales of properties
and disposition of inventories have allowed a large cash position
to accumulate at the Fleming parent level, money that is
available to satisfy the secured creditors.
Significantly, the proposed auction of Core-Mark held promise for
the realization of a substantial return for ultimate distribution
to the unsecured creditors and reclamation creditors. CVCMA,
LLC, a Texas limited liability company, was poised to bid a
substantial, all-cash offer for the Core-Mark assets.
Unfortunately, the Debtors aborted the auction before giving a
fair opportunity for the process to yield a buyer, electing
instead to file a plan of reorganization three days before the
final round of auction bids was to be made.
CVCMA communicated a formal offer to the Debtors and the Official
Committee of Unsecured Creditors to buy the Core-Mark assets for
$315 million. The Debtors rejected CVCMA's offer.
Even though all or substantially all of the plan objections have
been settled or withdrawn, Irving and Cavendish assert that those
resolutions are superficial, and that creditors in general should
be "provided the opportunity to consider a superior alternative."
The Debtors and the Committees have failed to present a plan
capable of achieving confirmation.
Irving and Cavendish intend to present a competing plan,
substantially similar to the Debtors and the Creditors
Committee's Joint Plan, but with the exception that creditors
receive a distribution from an all-cash sale as opposed to the
uncertain return from the shares of common stock proposed by the
Joint Plan. The competing plan will retain key attributes of the
Joint Plan, including proposed settlements with various
creditors.
Responses
(1) Debtors
Christopher J. Lhulier, Esq., at Pachulski Stang Ziehl Young
Jones & Weintraub, PC, in Wilmington, Delaware, calls the request
"factually incorrect, procedurally infirm, and highly prejudice"
to the Debtors' plan efforts. The request is nothing more than a
self-created emergency.
The Debtors' history with CVCMA, LLC, began in Fall 2003, during
which time the Debtors were exploring all options for exit from
bankruptcy -- including a sale of the Core-Mark assets. In
October 2003, the Debtors invited CVCMA and other interested
parties to participate in an exploratory sales process for
Fleming's Convenience Business. CVCMA signed a confidentiality
agreement and began preliminary due diligence. In November 2003,
CVCMA submitted a letter outlining its non-binding indication of
interest for $250 million for Fleming Convenience, but the letter
did not specify any equity source or funding mechanism.
The Blackstone Group, the Debtors' financial advisor, told CVCMA
that an equity source was required to continue with the bidding
process. CVCMA then obtained an equity sponsor, Investcorp, and
proceeded with due diligence. But in November 2003, Investcorp
notified Blackstone of its decision to withdraw. CVCMA then
acknowledged its lack of an equity source as an issue and told
Blackstone it would re-evaluate its options.
Second-round offers were due on December 12. CVCMA failed to
submit a second-round offer and was eliminated from the bidding
and the second round of due diligence.
Shortly after the commencement of the second diligence round, the
Unsecured Creditors Committee and the Debtors committed to
reorganize Fleming Convenience for numerous reasons, not the
least of which was that an option would maximize value to the
unsecured claimholders.
CVCMA subsequently contacted Blackstone on several occasions to
explore alternative ways to restart the sale process. Each time,
Blackstone advised that the Debtors and the Committee were now
pursuing a reorganization process, and that the sale process was
on hold pending the outcome of the reorganization.
In April 2004, the Debtors received an unsolicited and
conditional offer from CVCMA to purchase Fleming Convenience for
$315 million. The offer contained material conditions, like a
review of additional financial information, and was subject to a
reduction in price based on further due diligence.
Significantly, CVCMA acknowledged the Debtors' continuing
exclusivity and expressed disappointment that the Debtors had
chosen to pursue reorganization.
After analysis and consultation with the Creditors Committee, the
Debtors formally rejected CVCMA's bid letter and announced in
open court on May 4, 2004, that they would be proceeding with the
reorganization plan.
No Emergency
Mr. Lhulier says that there's no emergency. The Court already
has extended the Debtors' Exclusive Periods to a date negotiated
among the Debtors and the two statutory committees. The original
deadlines to object to the Exclusive Periods and to the
Disclosure Statement are both long past. Both Cavendish and
Irving received copies of all Disclosure Statement-related
notices and pleadings filed in the Debtors' cases, including the
notice setting the deadline to obtain to the Disclosure
Statement. Neither filed any objection.
Now, months after the deadlines have passed, and knowing full
well that the Joint Plan and Disclosure Statement process were
proceeding, these two parties filed an "emergency" request
objecting to the exclusivity and the Disclosure Statement and
Plan. Simply put, the request is too late.
Procedural Problems
Since the Disclosure Statement and the further extension of the
Exclusive Periods are already approved, Cavendish and Irving
could have filed a request, with proper notice, either for
reconsideration or some other proper form of protection -- but
they have not done so. There have been no changes in controlling
law or evidence, nor is there any manifest injustice or clear
error -- all requirements for Cavendish and Irving to bring a
request for equitable protection.
Where the only grounds suggested by a requesting party for
termination of the Exclusive Periods is to file an alternative
plan, the party must be able to show it has been treated unfairly
because it has been excluded from negotiations, and that the
filing of a competing plan will expedite the prompt resolution of
the bankruptcy cases. The Debtors and the Committee have already
determined that CVCMA's bid, devoid of any source of funding and
contingent upon material conditions, is not legitimate. CVCMA
would have the Debtors sell their remaining assets rather than
allow creditors and all constituencies to reap the benefit of an
on-going operation. The two official Committees support this
concept -- not liquidation. The request should be denied as no
more than a bad faith tactic to derail the Debtors' consensual
plan process.
(2) Reclamation Committee
The Official Committee of Reclamation Claimants, through Steven
K. Kortanek, Esq., at Klehr Harrison Harvey Branzburg & Ellers,
LLP, in Wilmington, Delaware, agrees with the Debtors' assessment
that the request is procedurally flawed and substantively
baseless.
The Reclamation Committee further notes that Irving and Cavendish
have failed to explain, let alone justify, why they failed to
raise timely their argument before the hearing on May 25, 2004.
As to the substance of the request, there isn't any, Mr. Kortanek
says. The Joint Plan as presented represents thousands of hours
of intensive negotiation and due diligence by the major
constituencies in the Debtors' cases and their professionals.
Contrary to Irving and Cavendish's allegation that the Joint Plan
does not represent a fair settlement reached through a
negotiation process among informed, interested parties, there is
no evidence that the compromises embodied in the Plan did not
result from arm's-length negotiations.
Irving and Cavendish state, without any supporting factual
analysis, that creditors would be better off if they are
permitted to put forward a competing plan. Irving and Cavendish
show a lack of appreciation of the complexities of the Debtors'
cases, or of the efforts of the Debtors and the creditor
constituencies that have resulted in the formulation of the Joint
Plan.
The Reclamation Committee's interests are not served by the
delay, rather its interests are best served by confirmation of
the currently pending Plan.
Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor
of consumer package goods in the United States. The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945). Richard L. Wynne, Esq., Bennett L. Spiegel, Esq.,
Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from its creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FLIR SYSTEMS: Wins $6.3 Million SAIC Contract for US Air Force
--------------------------------------------------------------
FLIR Systems, Inc. (Nasdaq:FLIR) announced that it has been
awarded a $6.3 million firm fixed-price contract from Science
Applications International Corporation (SAIC) for the United
States Air Force for the delivery of Star SAFIRE(TM) II airborne
thermal imaging systems to the Air Force Space Command. The units
are to be installed on their UH-1N helicopters for use on ICBM
security missions. Deliveries are expected to begin in the third
quarter of this year and be completed within 12 months.
"This order represents another important contract for our Star
SAFIRE(TM) product line. We are pleased the Air Force and SAIC
have chosen the proven Star II system for use on such an important
mission," commented Earl R. Lewis, Chairman, President and CEO of
FLIR Systems, Inc.
About FLIR Systems
FLIR Systems, Inc. is a world leader in the design, manufacture
and marketing of thermal imaging and stabilized camera systems for
a wide variety of thermography and imaging applications including
condition monitoring, research and development, manufacturing
process control, airborne observation and broadcast, search and
rescue, drug interdiction, surveillance and reconnaissance,
navigation safety, border and maritime patrol, environmental
monitoring and ground-based security. Visit the company's web site
at http://www.FLIR.com/
* * *
As reported in the Troubled Company Reporter's May 31, 2004
edition, Standard & Poor's Ratings Services assigned its 'B+'
rating to FLIR Systems Inc.'s $210 million 3.0% senior convertible
notes due 2023. Simultaneously, Standard & Poor's assigned its
'B+' corporate credit rating to the company. The outlook is
stable.
"The ratings reflect FLIR Systems' below-average business risk
profile due to the highly competitive market for imaging, where
competitors have substantially greater financial, technical, and
marketing resources, and the company's somewhat more aggressive
financial posture, including both acquisitions and share
repurchases," said Standard & Poor's credit analyst Rosemarie
Kalinowski. "These factors are partially offset by a still-solid
financial profile for the rating and a leading position in the
thermal imaging niche."
FORD MOTOR: Increases Second-Quarter Earnings Guidance
------------------------------------------------------
Ford Motor Company is raising its second-quarter earnings guidance
by 15 cents per share, from a range of 30 to 35 cents per share to
a range of 45 to 50 cents per share from continuing operations,
excluding special items.
The increase primarily reflects the strong performance of the
company's Financial Services Sector, which has benefited from
lower than anticipated credit losses, improved vehicle residual
values and a continuation of the low interest rate environment.
Full-year earnings now are expected to be in a range of $1.65 to
$1.75 per share, compared with previous guidance of $1.50 to $1.60
per share, in each case from continuing operations, excluding
special items.
As previously indicated, special items, consisting primarily of
the disposition of non-core businesses and completion of the
restructuring in Ford Europe, are estimated to reduce full-year
2004 earnings by about 7 to 9 cents per share.
* * *
As reported in the Troubled Company Reporter's December 5, 2003
edition, Standard & Poor's Ratings Services lowered its rating on
Ford STEERS Credit-Backed Trust Series 2002-3F and removed it from
CreditWatch with negative implications, where it was placed
Nov. 6, 2003.
The lowered rating and CreditWatch removal reflects the lowered
rating and CreditWatch removal of Ford Motor Co.'s long-term
corporate credit, senior unsecured debt, and preferred stock
ratings, and those of its related entities on Nov. 12, 2003.
The transaction is a swap-dependent synthetic transaction that is
weak-linked to the referenced obligation, Ford Motor Co. Capital
Trust II's preferred stock. The lowered rating and CreditWatch
removal reflects the credit quality of the underlying securities
issued by Ford Motor Co.
FOSTER WHEELER: Subsidiary Secures Service Contract in Thailand
---------------------------------------------------------------
Foster Wheeler Ltd. (OTCBB: FWLRF) announced that its subsidiary
Foster Wheeler International Corporation has been awarded an
engineering, onshore procurement, project and construction
management (EPCm) services contract for a world-scale purified
terephthalic acid (PTA) plant to be built in Thailand by Indorama
Petrochem Ltd. The terms of the contract were not disclosed.
The PTA plant will be built for Indorama at the Asia Industrial
Park close to Map Ta Phut in Thailand. The plant will process
paraxylene and acetic acid to give a minimum production rate of
640,000 metric tonnes per annum of PTA, which will be used for the
production of various polyester products.
The process front-end engineering package (FEEP) has been
developed for Indorama Petrochem Ltd. by INVISTA Inc., the process
licensor, from their INVISTA (UK) Limited technology group located
at Wilton, Teesside, in the UK.
Steve Davies, managing director, sales, marketing and strategic
planning, Foster Wheeler International Corporation, said: "We are
delighted to be involved in this major project which will be an
important addition to the petrochemicals industry in Thailand.
This contract award will build on Foster Wheeler's impressive
track record in Thailand and will give us the opportunity to
develop a successful relationship with Indorama. It also marks
another success in our relationship with INVISTA as a preferred
contractor and combines our experience in PTA with our historic
and continuous strength in Thailand."
The booking was included in Foster Wheeler's first-quarter
results.
About Foster Wheeler
Foster Wheeler Ltd. -- whose December 26, 2003 balance sheet shows
a total shareholders' deficit of $872,440,000 -- is a global
company offering, through its subsidiaries, a broad range of
design, engineering, construction, manufacturing, project
development and management, research and plant operation services.
Foster Wheeler serves the refining, oil and gas, petrochemical,
chemicals, power, pharmaceuticals, biotechnology and healthcare
industries. The corporation is based in Hamilton, Bermuda, and its
operational headquarters are in Clinton, New Jersey, USA. For more
information about Foster Wheeler, visit http://www.fwc.com/
GIT-N-GO: Kum & Go Acquires 76 Convenience Stores for $9 Million
----------------------------------------------------------------
Iowa-based Kum & Go convenience stores successfully acquired 76
convenience stores owned by Tulsa, Okla.-based Git-n-Go
convenience stores on June 15, 2004.
In the $9 million dollar purchase agreement, Kum & Go acquired 40
convenience stores located in Oklahoma and 36 in Missouri. The
transition will begin Monday, June 21, 2004 with all newly-
acquired stores converted to Kum & Go stores on or before July 7,
2004. The value of existing inventory will be added to the final
total cost.
"This acquisition will permit us to have a more significant
presence in Oklahoma and Missouri," says W.A. Krause, founder and
CEO of Kum & Go. "We look forward to investing in these new
communities. Our corporate values and policies include a
commitment of returning portions of our profits directly back to
the communities we serve. We plan to serve as a good corporate
citizen in every one of our locations." Following the
acquisition, Kum and Go will have 428 stores.
Stores included in the acquisition are as follows:
Missouri
Bolivar
Joplin
Lebanon
Marshfield
Republic
Springfield
Strafford
Webb City
Oklahoma
Bixby
Broken Arrow
Claremore
Cushing
Grove
Jenks
Krebs
Locust Grove
McAlester
Muskogee
Okmulgee
Owasso
Pawhuska
Pryor
Sand Springs
Sapulpa
Skiatook
Tulsa
"These newly-acquired stores strategically bring us one step
closer to our growth goals," says Kyle Krause, president of Kum &
Go. "We will update and add new products and services to many of
these stores, bringing efficiencies and a strong operational
mindset that rewards our associates and serves our customers.
Whenever possible, we will retain Git-n-Go employees."
"At Krause Gentle, our ongoing motto is 'people make the
difference, and the difference is, Kum & Go people.' Now with our
expansion, we're happy, proud and excited to include 'and Git N
Go,'" says W.A. Krause.
About Kum & Go
Founded on old-fashioned customer service, Kum & Go is a pioneer
in the convenience store industry. Kum & Go began in 1959 in
Hampton, Iowa and has grown to more than 428 convenience stores in
13 states (Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska,
North Dakota, Oklahoma, South Dakota, Colorado, Arkansas, Wyoming
and Wisconsin). Thanks to the efforts of over 3,500 associates,
Kum & Go convenience stores continue to lead the industry in
customer service and convenience. In addition to a wide selection
of products, Kum & Go provides customers a proprietary mix of
products under the well-known Hiland brand name including gourmet
coffee, water, potato chips, sandwiches and snack nuts.
Kum & Go has maintained 45 years of dedicated community
commitment, each year returning 10 percent of its profits to the
communities it serves. Kum & Go is the United State's 22nd
largest convenience store chain. For more information on Kum &
Go, visit http://www.kumandgo.com/
About Git-N-Go, Inc
Git-N-Go, Inc, operator of a chain of convenience stores, filed
for chapter 11 protection (Bankr. N.D. Okla. Case No. 04-10509) on
January 30, 2004. Timothy T. Trump, Esq. of Conner & Winters
represents the Debtor in its restructuring efforts. At January 30,
2004, the Debtor posted assets of $24,700,220 and liabilities of
$25,176,786.
GMAC COMMERCIAL: Fitch Affirms CCC Rating on Classes L & M Notes
----------------------------------------------------------------
Fitch Ratings affirms GMAC Commercial Mortgage Securities, Inc.'s
commercial mortgage pass-through certificates, series 1998-C1 as
follows:
--$83.8 million class A-1 'AAA';
--$687.4 million class A-2 'AAA';
--$28.8 million class B 'AA+';
--$64.7 million class C 'AA';
--$75.5 million class D 'A';
--$68.3 million class E 'BBB';
--$43.1 million class F 'BBB-';
--$32.4 million class G 'BB+';
--$25.2 million class H 'BB';
--$14.4 million class J 'B';
--$25.2 million class K 'B-';
Interest only class X 'AAA';
The $14.4 million class L and $10.8 million class M certificates
remain 'CCC'.
Fitch does not rate the $10.0 million class N certificates.
The ratings affirmations reflect stable loan performance and
paydown. As of the May 2004 distribution date, the pool's
aggregate certificate balance has decreased 17.57% to $1.184
billion from $1.438 billion at issuance. Of the original 181
loans, 154 remain outstanding in the pool. There are 5 loans
(18.53%) with the special servicer.
The largest loan (16.87%) in special servicing, Senior Living
Properties, is collateralized by a pool of 72 healthcare
properties located in various states and remains current. The
borrowers filed for bankruptcy protection in May 2002. The loan is
backed by a surety bond, which has been guaranteed by Centre
Solutions. Fitch closely monitors Centre's financial strength.
The borrower's Chapter 11 bankruptcy plan was confirmed and all
related transactions have closed. Pursuant to the plan the loan
document modifications include removal of all release price
restrictions on the facilities and a provision that the proceeds
from the sale or refinance of the facilities will be applied to
the principal balance without prepayment yield maintenance or
application of defeasance terms. A new board has been installed
who will work towards sale or refinance of the facilities over
time. A surety settlement and reaffirmation agreement has been
signed with the surety bond unchanged. The trust's mortgage lien
has been primed by bankruptcy exit financing totaling $24 million.
New management has also been installed with an incentivized
contract with a management fee less than historical cost.
The second largest loan of concern is Camlu Retirement Apartments
(1.8%) which consists of multiple independent/assisted living
properties. The loan was transferred to Special Servicing in
February 2004 due to imminent default. In January 2004 the
borrower expressed in writing its inability to make future
payments due to the poor performance of one of the three subject
health care properties. Additionally, the loan is in DSC covenant
default. The borrower has proposed selling the property subject to
the assumption and modification of the loan. Special Servicing has
ordered valuation assessments and is reviewing the proposal.
Hypothetical stress scenarios were applied to the trust, where
specially serviced and other loans that concerned Fitch as having
the potential to become problematic were assumed to default. Even
under these stress scenarios, the resulting subordination levels
remain sufficient to affirm the current ratings.
GTC TELECOM: Telspan Withdraws Bid for Mexican Fiber Optic Network
------------------------------------------------------------------
GTC Telecom Corp. (OTCBB:GTCC) and TelSpan Inc. provided a status
update as to TelSpan's efforts to acquire the Telereunion Mexican
fiber optic network and related assets as previously announced.
Recently, the United States Bankruptcy Court For the District of
Delaware, pursuant to an Amended Bid Procedures Order, held a
supplemental auction for the acquisition of the network.
At the time of the auction, TelSpan's investors believed that the
procedures in effect did not sufficiently provide adequate
assurance that they would be able to acquire complete control of
the network.
Consequently, TelSpan elected not to submit a bid. As a result,
according to the Court's records, a third party submitted a bid
which was accepted by the Court. Court documents indicate that the
third party has until approximately July 25, 2004, to fully fund
the acquisition and to close on its acquisition agreement.
GTC and TelSpan are currently in discussions with regards to how
the companies shall proceed. Additional details will be released
as they materialize.
About GTC Telecom Corp.
Founded in 1997, GTC Telecom and its subsidiaries provide long-
distance, calling card, conference calling and toll-free services;
Internet access to residential customers throughout the United
States. GTC provides its services directly to consumers, as well
as through affiliate marketing programs with companies like Best
Buy Inc. For more information visit http://www.gtctelecom.com/
At March 31, 2004, GTC Telecom's balance sheet shows a
stockholders' deficit of $7,421,825 compared to a deficit of
$6,392,967 at June 30, 2003.
INTERLINE BRANDS: S&P Places Low-B Ratings On CreditWatch Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit and bank loan ratings and 'B-' subordinated debt rating on
Interline Brands Inc. on CreditWatch with positive implications.
"The CreditWatch action reflects the potential for lower debt
leverage and greater financial flexibility if the company's
planned initial public offering of common stock is successful,"
said Standard & Poor's credit analyst Pamela Rice.
Estimated proceeds of $200 million are expected to be used to
repay $102 million of debt, pay $55 million to preferred stock
holders, and for fees, expenses, and other general corporate
purposes. Jacksonville, Florida-based Interline had debt,
including capitalized operating leases, of $375 million at March
26, 2004, with debt to EBITDA of 4.9x. If completed as currently
structured, this transaction would reduce Interline's very
aggressive debt leverage on a pro forma basis to 3.6x at the end
of the first quarter.
Ratings could be raised if Standard & Poor's is confident that the
company will maintain a less-aggressive capital structure over the
intermediate term. However, Standard & Poor's expects Interline to
remain acquisitive, and ratings could be affirmed if the company
is more likely to finance growth opportunities in a manner
consistent with its current ratings. Standard & Poor's will meet
with management to review its business plan, including growth
strategies, financial policies, and financial projections before
taking any further rating action.
Interline is a U.S. distributor of maintenance, repair, and
operations products, with revenues of about $660 million during
the last 12 months. MRO products, including plumbing, electrical,
hardware, security, and tools, typically are used by heavy
industrial manufacturers, and facilities such as apartment
buildings, schools, hotels, and health care institutions, as well
as by professional contractors and in new residential and
commercial construction. Interline focuses on less-cyclical repair
and remodeling end markets, with sales primarily to facilities
maintenance and professional contractors.
Interline, which operates in a highly fragmented industry, has a
nationwide distribution network, a broad offering of products, and
a diverse and long-standing customer base. Operating margins, in
the 12% to 13% range, are higher than those of typical
distribution companies and compare favorably with other MRO
competitors.
JILLIAN'S ENTERTAINMENT: Hiring Frost Brown Todd as Co-Counsel
--------------------------------------------------------------
Jillian's Entertainment Holdings, Inc., and its debtor-affiliates
the U.S. Bankruptcy Court for the Western District of Kentucky,
Louisville Division, for permission to hire Frost Brown Todd LLC
as their co-counsel.
Frost Brown, in conjunction with Kirkland & Ellis LLP, will:
a) take all necessary action to protect and preserve the
estates of the Debtors, including the prosecution of
actions on the Debtors' behalf, the defense of any actions
commenced against the Debtors, negotiations concerning all
litigation in which the Debtors are involved, and
objecting to claims filed against the estate;
b) prepare on behalf of the Debtors, as debtors in
possession, all necessary motions, applications, answers,
orders, reports and papers in connection with the
administration of the estates herein;
c) negotiate and prepare on behalf of the Debtors a plan or
plans of reorganization and all related documents; and
d) perform all other necessary legal services in connection
with these chapter 11 cases.
Dale A. Ahearn, Esq., reports that Frost Brown's current customary
hourly rates are
Designation Billing Rate
----------- ------------
Members and Counsel $245 to $350 per hour
Associates $85 to $225 per hour
Paralegals $30 to $130 per hour
Headquartered in Louisville, Kentucky, Jillian's Entertainment
Holdings, Inc. -- http://www.jillians.com/-- operates more than
40 restaurant and entertainment complexes in about 20 US states.
The Company filed for chapter 11 protection on May 23, 2004
(Bankr. W.D. Ky. Case No. 04-33192). Edward M. King, Esq., at
Frost Brown Todd LLC and James H.M. Sprayregen, P.C. at Kirkland &
Ellis LLP, represent the Debtors in their restructuring efforts.
When the Company filed for protection from their creditors, they
listed estimated assets of more than $100 million and estimated
debts of over $50 million.
JJ'S I-17 OPPORTUNITIES: Case Summary & 11 Unsecured Creditors
--------------------------------------------------------------
Debtor: JJ'S I-17 Opportunities, Inc.
22035 22047 North Blackcanyon Highway
Phoenix, Arizona 85027-1915
Bankruptcy Case No.: 04-10492
Type of Business: The Debtor is an owner and operator of rental
property.
Chapter 11 Petition Date: June 15, 2004
Court: District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: William R. Richardson, Esq.
William R. Richardson, P.C.
1745 South Alma School Road, #100
Mesa, AZ 85210-3010
Tel: 480-464-0600
Fax: 480-464-0602
Total Assets: $1,700,000
Total Debts: $1,200,000
Debtor's 11 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
James E. Finegan $41,000
David M. Kozak $24,478
JLC Pension Fund $10,000
Gerald Gruetzemacher $8,382
DiSimone Family Trust $7,000
Mark Baskind, CPA $6,127
Wayne and Jan Reynolds $4,000
JLC Consulting $3,742
Steve Welker, CPA $3,100
DEX-Media, Inc. $1,916
National Construction Fence Rentals $1,875
NEWMARKET: Dan Scofield and Mike Tinsley Join Board of Directors
----------------------------------------------------------------
NewMarket Technology Inc. (OTCBB:IPVO) announced Dan Scofield and
Mike Tinsley to the Board of Directors. NewMarket has grown
rapidly over the last two years from a small publicly traded
research and development concern with negligible revenue into a
$15 million in annualized revenue company beginning to win
recognition for introducing a new business model to continuously
market launch emerging technologies. NewMarket projects a
profitable annualized revenue run rate of $50 million by December
and to book over $20 million in revenue for the year. The new
business model includes the periodic spin-off of emerging
technologies into separate publicly listed companies. As the
NewMarket business model matures, the Company is taking steps to
prepare for institutional grade investment attention. Expanding
the Board of Directors and fortifying the corporate governance
process and procedures is an initial step towards elevating the
company into view for institutional investment.
"Institutional investment organizations by mandate do not usually
consider OTCBB listed companies for investment," said Philip
Verges, CEO of NewMarket. "Accordingly, the caliber and terms of
capital investment products available to OTCBB listed companies is
limited by the volatility of that market without the stabilizing
influence of long-term institutional investment. NewMarket has
worked to avoid the typical capital investments available to most
OTCBB listed companies. We intend to first grow the operational
magnitude of NewMarket to the level required for institutional
investment interest and demonstrate the basic criteria expected in
an institutional investment arena. Our growth to date has edged
NewMarket into that arena and the expansion of our Board is a
basic first step to fortify our position. We do not plan to
consider investment on a scale that would require a registration
filing until we have clearly established institutional grade
consideration."
Dan Scofield joined NewMarket at the end of 2003 as President and
Chief Operating Officer. Mr. Scofield now expands his
responsibilities as a Board Member. He has more than 15 years in
operations and service management for consumer and technology
companies, including computer and telecom manufacturing
organizations. Scofield has also led a $260 million revenue
business and launched major new product initiatives. He has
successfully created two service companies (Global Service
Solutions and Product Support Services), in addition to holding
several senior management positions with CompUSA and Uniden, where
he served as Division President and Vice President of Operations.
Prior to Uniden, he was Vice President of Professional Services
for MicroAge Computer Centers and served twelve years in the
United States Navy as a commander of Information Services and
Aviation Maintenance operations.
Mike Tinsley is currently a partner at Corporate Revitalization
Partners, LLC. Mr. Tinsley has more than 20 years of operational
experience at the CEO level. Mr. Tinsley brings to the Board a
wealth of experience in corporate restructuring and senior
management oversight. He also brings to the Board a fresh
perspective with a diverse industry background, most of which is
outside the technology industry. Given that NewMarkets' business
strategy includes the acquisition of distressed systems
integration firms, Mr. Tinsley's previous 12 years where he has
focused his efforts on turn around opportunities is a valuable
asset to the Company. Mr Tinsely's industry experience includes
packaging, apparel, foodservice equipment, retail fixture, point
of purchase display, visual merchandising, materials handling and
storage, analog/digital measurement systems, printing services,
media, chemical, retail services, affinity marketing,
construction/erosion control and custom software development. Mr.
Tinsley also has international experience with previous management
responsibility for operations in the United States, Canada,
Mexico, England, Ireland, France and China.
About NewMarket Technology Inc.
NewMarket (currently undergoing a corporate name change from
IPVoice Communications Inc.) is a six-year-old company that has
reported as a research and development concern for most of its
history. In 2002, NewMarket launched a new business plan, which
resulted in the Company posting six consecutive profitable
quarters through 2003 and establishing an annualized $15 million
in revenue. The Company is actively acquiring early-stage
proprietary technology companies and financially distressed
systems integration companies in specific global markets. In 2003,
NewMarket acquired Infotel Technologies in Singapore and IP Global
Voice, led by CEO Peter Geddis, a former Executive Vice President
and Chief Operating Officer of Qwest Communications (NYSE:Q). The
Company recently acquired Medical Office Software Inc.,
diversifying its communications technology offering into the
healthcare industry. RKM IT Solutions of Caracas, Venezuela was
also recently acquired as NewMarket's entry into the Latin
American market.
* * *
Liquidity and Capital Resources
In the Form 10-QSB for the quarterly period ended March 31, 2004,
NewMarket reports:
"At March 31, 2003, the Company had cash of $16,300 and a working
capital deficit of $1,510,700 as compared to cash of $1,395,000
and working capital surplus of $252,000 at March 31, 2004. This
improved working capital situation was due primarily to the
implementation of the previously herein described new business
model implemented in June 2002, which includes as part of the plan
the acquisitions made over the last year. In addition we have been
successful attracting investment capital to carry out this
business model.
"Since inception, the Company has financed operations primarily
through equity security sales and convertible debt. The nature of
the growth strategy of the Company will require further funding to
be acquired either through equity or debt. Accordingly, if
revenues are insufficient to meet needs, we will attempt to secure
additional financing through traditional bank financing or a debt
or equity offering; however, because the rapid growth and nature
of the acquisitions of the Company and the potential of a future
poor financial condition, we may be unsuccessful in obtaining such
financing or the amount of the financing may be minimal and
therefore inadequate to implement our continuing plan of
operations. There can be no assurance that we will be able to
obtain financing on satisfactory terms or at all, or raise funds
through a debt or equity offering. In addition, if we only have
nominal funds by which to conduct our operations, it will
negatively impact our potential revenues."
JP MORGAN: S&P Assigns Preliminary Low-B Ratings to 6 Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to J.P. Morgan Chase Commercial Mortgage Securities
Corp.'s $1.1 billion commercial mortgage pass-through certificates
series 2004-CIBC9.
The preliminary ratings are based on information as of June 16,
2004. Subsequent information may result in the assignment of final
ratings that differ from the preliminary ratings.
The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying mortgage loans, and the
geographic and property type diversity of the loans. Classes A-1,
A-2, A-3, A-4, B, C, D, and E are currently being offered
publicly. Standard & Poor's analysis of the portfolio determined
that, on a weighted average basis, the pool has a debt service
coverage of 1.61x, a beginning LTV of 87.5%, and an ending LTV of
71.9%.
Preliminary Ratings Assigned
J.P. Morgan Chase Commercial Mortgage Securities Corp.
Class Rating Amount ($)
A-1 AAA 65,887,000
A-2 AAA 205,168,000
A-3 AAA 85,506,000
A-4 AAA 431,837,000
A-1A AAA 171,133,000
B AA 27,853,000
C AA- 13,927,000
D A 20,889,000
E A- 11,142,000
F BBB+ 15,319,000
G BBB 9,748,000
H BBB- 18,104,000
J BB+ 2,786,000
K BB 4,178,000
L BB- 5,570,000
M B+ 5,571,000
N B 2,785,000
P B- 2,785,000
NR N.R. 13,927,388
X* AAA 1,114,115,388**
*Interest-only class. **Notional amount. N.R.-Not rated.
K2 INC: S&P Rates Corporate & Senior Debt Ratings at BB
-------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'BB' corporate
credit rating to sporting goods manufacturer K2 Inc. At the same
time, Standard & Poor's assigned a 'BB' senior unsecured debt
rating to the company's planned $150 million senior unsecured note
offering due in 2014. The notes will be issued under Rule 144A
with registration rights. The outlook is stable.
K2 plans to use these issues in a combination with about $150
million of equity to fund the acquisitions of Volkl Sports
Holdings AG, CT Sports Holding AG, and Marmot Mountain Ltd., as
well as to refinance existing debt.
"Carlsbad, California-based K2 Inc.'s ratings reflect its
participation in the highly competitive and mature sporting goods
manufacturing industry, and an aggressive acquisition strategy,"
said Standard & Poor's credit analyst Patrick Jeffrey. "These
risks are mitigated somewhat by the company's leading market
positions in the industry and its continued use of equity to help
fund its growth strategy."
K2 competes in the highly competitive and fragmented sports
equipment manufacturing industry, which has been growing at low
levels in recent years. To address the competition and industry
fragmentation, many companies have been making acquisitions to
achieve scale and diversify both product lines and geographical
presence. The company continues to be highly acquisitive in its
growth strategy. In two years, it has acquired or announced the
acquisitions of 11 businesses. As part of its strategy, it has
consolidated and transferred manufacturing to China when possible,
achieving significant cost savings. Future acquisitions will most
likely expand existing product segments, but also focus more on
core established market segments. While K2's acquisition history
has been good, the company entered the high-end scooter segment in
Europe in 2001, which proved to be unsuccessful. The company later
exited the market. K2 also divested its light pole business in
2003 to focus more on core sporting goods segments.
K2's acquisition growth strategy has resulted in leading market
positions in the sporting goods manufacturing segment, and a more
diversified product portfolio and geographic presence. The
company's growth strategy has resulted in leading market positions
in many categories with brands such as K2, Volkl, and Marker in
skiing, Rawlings in baseball, and Shakespeare in fishing. The
company's growth in segments outside of its core skiing business
has resulted in better seasonal and geographic diversity. Pro
forma for acquisitions, U.S. sales are still expected to
represent 75% of total sales.
KIEL BROS. OIL: Case Summary & 39 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Kiel Bros. Oil Company, Inc.
3801 Tupelo Drive
Columbus, Indiana 47201
Bankruptcy Case No.: 04-92128
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
KP Oil, Inc. 04-92129
Type of Business: The Debtor operates a convenience store and
has a wholesale fuel supply business.
Chapter 11 Petition Date: June 15, 2004
Court: Southern District of Indiana (New Albany)
Judge: Basil H. Lorch, III
Debtors' Counsel: Jay Jaffe, Esq.
Baker & Daniels
600 East 96th Street Suite 600
Indianapolis, IN 46240
Estimated Assets Estimated Debts
---------------- ---------------
Kiel Bros. Oil Company, Inc. $10 M to $50 M $10 M to $50 M
KP Oil, Inc. $10 M to $50 M $0 to $50,000
A. Kiel Bros. Oil Company's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Mclane Company, Inc. Trade Debt $7,575,910
4747 Mclane Pkwy.
Temple, TX 76503-645
BP Products North America Trade Debt $4,666,027
Inc.
200 Public Square
Cleveland, OH 44114
Marathon-Ashland LLC Trade Debt $4,599,731
539 South Main Street
Findlay, OH 45840
Pepsi Cola General Bottlers, Trade Debt $454,364
Inc.
75 Remittance Dr., Ste 1884
Chicago, IL 60675-1884
Hossier Lottery Lottery $430,166
201 S. Capitol Ave. Ste 110
Indianapolis, IN 46225
Frito-Lay Inc. Trade Debt $215,768
George Timmering Retirement Package $157,037
Coca-Cola Bottling Co. Trade Debt $153,332
Coca-Cola Bottling Co-Indpls Trade Debt $119,305
Coca-Cola Enterprises, Inc. Trade Debt $98,153
Dean Milk Co., Inc. Trade Debt $76,610
Novelty, Inc. Trade Debt $68,103
Pace Oil Equipment Co., Inc. Trade Debt $62,523
Dean Foods Company Trade Debt $60,778
Canada Dry Bottling Co. Trade Debt $58,321
Interstate Brands Trade Debt $58,338
Cosner Ice Co., Inc. Trade Debt $55,194
G & J Pepsi Lexington Trade Debt $54,831
Midwest Maintenance and Trade Debt $50,566
Construction Co., Inc.
Linco Coffee Services Trade Debt $48,537
Landshire Foods #2 Trade Debt $48,428
Blue Rhino Corporation Trade Debt $44,584
B. KP Oil, Inc.'s 19 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Barton H. Reutlinger, M.D. Landlord $0
Bluegrass Mgmt. Services, Landlord $0
Inc.
Carmen M. Mcgiffen Living Landlord $0
Trust
Carol L. Plask Landlord $0
Darell Moberly Landlord $0
Elizabeth Reutlinger Landlord $0
Finley Commercial Enterprises Landlord $0
Gayle Lannert Wieman Landlord $0
Jerry L. & Cheryl L. Barnes Landlord $0
John P. Lannert Landlord $0
Joseph D. & Jennifer B. Landlord $0
Murphy
Lannert Station, LLC Landlord $0
Lansdowne Shopping Center Landlord $0
Louisville Gas & Electric Co Landlord $0
Maple Leaf Partnership Landlord $0
Mary R. Mitchell Landlord $0
Mike Smith Inc. Landlord $0
Taylorsville Road Realty Co. Landlord $0
Wickersham & Bentley Landlord $0
Partnership
LANTIS EYEWEAR: Seeks Nod to Hire Ordinary Course Professionals
---------------------------------------------------------------
Lantis Eyewear Corporation is asking the U.S. Bankruptcy Court for
the Southern District of New York for authority to continue the
employment of the professionals it is utilizing in the ordinary
course of business.
Prior to the Petition Date, the Debtor employed a number of
professionals in the ordinary course of business. The continued
availability of the services of the Ordinary Course Professionals
postpetition is essential to the Debtor's operations and is
critically important to ensure the efficient administration of the
Debtor's assets.
In the ordinary course of Debtor's business, the Debtor's employs
intellectual property attorneys and auditing and accounting
professionals. Because of the limited number and the nature of
services provided by the Ordinary Course Professionals retained,
the Debtor believes it would be wasteful and burdensome to its
estate and the Court to request that each
Professional apply separately for employment approval.
The Debtor proposes that it be permitted to pay 100% of the fees
and disbursements incurred by each Ordinary Course Professional on
a monthly basis. The payments would be made in the ordinary course
of the Debtor's business, following the submission of an
appropriate monthly invoice setting forth in reasonable detail the
nature of the services rendered and the disbursements actually
incurred; provided, however, that the fees will not exceed a total
of $10,000 in a given month or an aggregate of $100,000 in the
course of this chapter 11 case.
Headquartered in New York, New York, Lantis Eyewear Corporation --
http://lantiseyewear.com/-- is a leading designer, marketer and
distributor of sunglasses, optical frames and related eyewear
accessories throughout the United States. The Company filed for
chapter 11 protection on May 25, 2004 (Bankr. S.D.N.Y. Case No.
04-13589). Jeffrey M. Sponder, Esq., at Riker, Danzig, Scherer,
Hyland & Perretti, LLP represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed $39,052,000 in total assets and $132,072,000 in total
debts.
MARKLIN PROPERTIES: US Trustee Doesn't Form a Creditors' Committee
------------------------------------------------------------------
Ilene J. Lashinsky, the United States Trustee for Region 14
reports to the U.S. Bankruptcy Court for the District of Arizona
that no Official Unsecured Creditors Committee has formed in
Marklin Properties LLC's chapter 11 case. Ms. Lashinsky said that
she has not attempted to form a creditors' committee in the
Debtor's case because there the number of unsecured creditors with
substantial claims is insufficient.
Headquartered in Scottsdale, Arizona, Marklin Properties LLC filed
for chapter 11 protection on May 21, 2004 (Bankr. D. Ariz. Case
No. 04-02566). Jerry L. Cochran, Esq., at Cochran & Dahl, PC
represents the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed
$11,167,619 in total assets and $8,355,012 in debts.
MARSH SUPERMARKETS: S&P Airs Concerns Over Weak Sales Trends
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Marsh
Supermarkets Inc. to negative from stable. Ratings on the company,
including the 'B+' corporate credit rating, were affirmed.
The outlook revision reflects concerns over Marsh's continued weak
sales trends. For its fourth quarter ended March 29, 2004, the
company reported a 1.7% decline in comparable supermarket and
convenience store sales. Excluding gasoline sales, the decline for
store merchandise was 3.3%. In addition, Marsh continues to be
challenged by a highly competitive environment and the continued
weak economy in Indiana.
"The ratings on Marsh reflect the company's heavy debt burden,
recent weak sales trends, below-average operating margins, and the
highly competitive nature of the supermarket industry," said
Standard & Poor's credit analyst Stella Kapur. "These risks are
somewhat mitigated by the company's leading position in its
primary market of Indianapolis, Indiana"
Marsh operates 113 supermarkets and 164 Village Pantry convenience
stores in the Indiana and western Ohio area. In Indianapolis, the
company has a market share of about 29%, similar to that of Kroger
Co., according to the 2003 Market Scope. However, the company has
faced intense competition in past years from store openings by
Wal-Mart Stores Inc., Kroger, and others. This factor, along with
increased promotional activity from competitors and more selective
consumer shopping patterns, contributed to a 1.4% same-store
retail sales decline for full-year 2004, following a 3.1% drop the
year before. In addition, the Village Pantry convenience store
business segment continues to face challenges due to volatile
gasoline prices.
Despite negative comparable-store sales, total revenues remained
relatively flat at $1,651 million for the fiscal year ended March
2004. Operating income improved significantly, to $20.6 million in
2004 from $14.4 million in 2003. However, the comparison was
relatively easy given that fiscal 2003 did not have an Easter
selling season due to an early Easter in calendar 2002 and a late
Easter in calendar 2003. Furthermore, 2003 operations were also
hurt by a weak economy, food-price deflation, the war in Iraq, and
increased competitive promotions and square footage.
MARVEL ENTERPRISES: Now Debt Free with Over $150 Million Cash
-------------------------------------------------------------
Marvel Enterprises, Inc., (NYSE:MVL) a global entertainment
licensing company, announced that it has redeemed all of the
outstanding $150,962,000 in principal amount of the Company's 12%
Senior Notes due 2009. The redemption price was $106 for each $100
in principal amount of the Notes, plus six-months of accrued
interest totaling approximately $9 million, for a total cash
outlay to redeem the Notes of approximately $169 million. Marvel
funded the Senior Notes redemption with cash on hand. Following
the redemption, at June 15, 2004 Marvel had over $150 million in
cash, certificates of deposit and commercial paper and no debt.
As previously announced, Marvel expects to record approximately
$16 million in aggregate interest expense in the second quarter of
2004, consisting of $4 million of net interest expense for the
three-months ended June 30, 2004, the early redemption premium of
roughly $9 million, and $3 million of previously unamortized
deferred debt costs related to the Senior Notes. Marvel
anticipates cash levels at December 31, 2004 to approximate $200
million, reflecting anticipated Federal income tax payments
resulting from the recent exhaustion of Federal net operating loss
(NOL) carry-forwards. Marvel commenced payment of cash Federal
income taxes in the second quarter, which are expected to amount
to $45-$55 million in fiscal 2004.
"Redeeming our Senior Notes at the earliest allowable time has
been a goal of Marvel since we emerged from bankruptcy and
refocused our business on high-margin consumer and entertainment
licensing initiatives," said Allen Lipson, Marvel's President and
CEO. "Emerging as a debt-free company with a growing cash position
is a testament to our business model and ability to leverage our
popular brands to generate strong cash flows."
About Marvel Enterprises
With a library of over 4,700 proprietary characters, Marvel
Enterprises, Inc. is one of the world's most prominent character-
based entertainment companies. Marvel's operations are focused in
four areas: entertainment (Marvel Studios), licensing, comic book
publishing and toys (Toy Biz). Marvel facilitates the creation of
entertainment projects, including feature films, DVD/home video,
video games and television based on its characters and also
licenses its characters for use in a wide range of consumer
products and services including apparel, collectibles, snack foods
and promotions. Marvel's characters and plot lines are created by
its comic book division which continues to expand its leadership
position in the U.S. and worldwide while also serving as an
invaluable source of intellectual property.
MIRANT CORPORATION: Wants To Consummate E&CS Settlement Agreement
-----------------------------------------------------------------
Mirant Corp. asks the Court to allow it to:
(a) consummate the "Settlement Agreement and Release" with
Energy and Communications Solutions, LLC; and
(b) reject the "Agreement for Purchase and Sale of Greenhouse
Gas Emissions Reductions Benefits" between E&CS and
Mirant, dated January 22, 2003.
Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas,
relates that under the Contract, Mirant agreed to purchase
certain Tradeable Emissions Reduction Benefits from E&CS. One
TERB represents the tradable benefit of the Global Warming
Potential of one metric ton of Carbon Dioxide Equivalent emission
reduction, as defined by international, national or local laws or
regulations, including the Kyoto Protocol.
At the time the Contract was executed, E&CS was in the process of
developing projects in Russia and Ukraine that reduce Accepted
Greenhouse Gasses. Mirant desired to purchase some of the TERBs
associated with the Projects.
Mr. Peck notes that the Contract specifies that E&CS would
designate certain Projects as associated with the Contract, with
the intent of using those Projects to produce the TERBs required
by the Contract, on or before January 27, 2004. E&CS agreed to
deliver a target volume of 400,000 TERBs, but in no event less
than 200,000 TERBs. Pursuant to the Contract, the TERBs were to
be delivered as soon as created and available, but in no event
later than April 1, 2008.
Mr. Peck explains that Mirant entered into the Contract because
certain states where the Debtors conduct business have, or are
developing, CO2 regulations. A federal regulatory program is
possible in the future. The TERBs or "credits" could help offset
the Debtors' cost of purchasing CO2 emissions allowances in the
future, which may be necessary to offset the Debtors' emissions.
Moreover, the Debtors view the Contract as part of their
commitment to address climate change as outlined in their
publicly announced Climate Change Action Plan.
The Contract requires the establishment of an escrow account. In
January 2003, Mirant provided E&CS with $350,000, which E&CS
deposited in an account with Riggs Bank. It appears that no
formal escrow was established and no independent escrow agent was
ever appointed.
According to Mr. Peck, E&CS had expressed its intent to assert
claims against the Debtors for any damages it might incur in
connection with any rejection of the Contract, including
retention of the Funds. On the other hand, Mirant has expressed
its belief that the Funds should be returned to it in its
entirety as property of the Debtors' estate. Mirant maintains
that E&CS has not completed sufficient work to entitle it to the
entire Funds in the Account. E&CS has taken a contrary position.
To settle their disputes, Mirant and E&CS entered into a
Settlement Agreement wherein:
(i) E&CS will not oppose the rejection of the Contract; and
(ii) E&CS will turn over the Funds remaining in the Account to
Mirant, less $100,000 as Settlement Amount.
Mr. Peck contends that the settlement is warranted because the
characterization of the Account is uncertain, thus, the issue
would undoubtedly be litigated by the parties, which is
expensive, time-consuming and the outcome is uncertain.
Moreover, Mr. Peck argues that rejecting the Contract is
necessary given that applicable law does not require acquisition
of the TERBs, but rather, represent a voluntary "environmental
stewardship" project. The TERB trading market is a developing
market with limited liquidity. Under the circumstances, it is
more beneficial to the Debtors to be paid the $250,000 from the
Account and reject the Contract rather than continue with the
Contract and acquire TERBs that may be of little or no use in the
near future.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean. The Company filed for
chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590). Thomas E. Lauria, Esq., at White & Case LLP represent the
Debtors in their restructuring efforts. When the Company filed
for protection from their creditors, they listed $20,574,000,000
in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MJ RESEARCH: Greenberg Traurig Serves as Litigation Counsel
-----------------------------------------------------------
MJ Research, Incorporated sought and obtained approval from the
U.S. Bankruptcy Court for the District of Nevada to employ and
retain Greenberg Traurig LLP as its special corporate and
litigation counsel.
The Debtor believes that Greenberg Traurig is qualified to
represent its interests and the interests of its estate. Many of
the Greenberg Traurig attorneys who are expected to work on this
case have represented the Debtor since March of 2000 in qui tam
litigation pending in the Central District of California, as well
as in various matters related to its corporate affairs.
Because the qui tam litigation is likely to continue to be
complex, the Debtor will require counsel familiar with the facts
of the case as well as the Debtor's business and operations.
Specifically, Greenberg Traurig will:
a. advise and counsel the Debtor in connection with all
aspects of the Litigation including, but not limited to,
any appeal related to any adverse judgment that may be
entered against the Debtor in the Litigation and with
respect to any relief that may be sought from the
Bankruptcy Court related to the Litigation;
b. advise and counsel the Debtor in connection with all
aspects of the California Litigation including, but not
limited to, pursuing the Debtor's appeal before the Ninth
Circuit Court of Appeals, prosecuting the California
Litigation in the event it is remanded to the California
District Court, any appeal related to any adverse judgment
that may be entered against the Debtor in the California
Litigation, and with respect to any relief that may be
sought from the Bankruptcy Court related to the California
Litigation;
c. advise and counsel the Debtor with respect to its general
corporate, real estate, employment, pension,
transactional, litigation and tax matters arising in or
outside of bankruptcy; and
d. perform the full range of services normally associated
with the matters set forth above as the Debtor's special
corporate and litigation counsel and which Greenberg
Traurig is in a position to provide.
Greenberg Traurig professionals who will be principally engaged in
this retention are:
Professional Billing Rate
------------ ------------
C. Allen Foster $600 per hour
Scott D. Cousins $515 per hour
Joseph B. Darby, III $500 per hour
Jeffrey M. Wolf $475 per hour
Joseph P. Davis, III $400 per hour
Anna Sanakaran $375 per hour
Victoria W. Counihan $370 per hour
Kevin E. Stern $350 per hour
Araceli Aguilar $180 per hour
Elizabeth Thomas $135 per hour
Other attorneys and paralegals will render services to the Debtor
as needed. Generally, Greenberg Traurig's hourly rates are:
Title Billing Rate
----- ------------
Shareholders $250 to $700 per hour
Associates $180 to $435 per hour
Legal Assistants/
Paralegals $75 to $215 per hour
Headquartered in Reno, Nevada, MJ Research, Incorporated
-- http://www.mjr.com/-- is a leading biotechnology company
specializing in the instrument and reagent technology needed for
modern biological research. The Company filed for chapter 11
protection on March 29, 2004 (Bankr. D. Nev. Case No. 04-50861).
Jennifer A. Smith, Esq., at Lionel Sawyer & Collins represents the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed both estimated debts and
assets of over $10 million.
MOTOR COACH: S&P Upgrades Corporate Credit Rating to B- from CCC
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Schaumburg, Illinois-based Motor Coach Industries
International Inc. to 'B-' from 'CCC'. Standard & Poor's also
raised its subordinated debt rating on Motor Coach to 'CCC' from
'CC'. Ratings are removed from CreditWatch where they were placed
on Feb. 12, 2004. Pro forma debt at April 30, 2004, stood at about
$450 million. The outlook is negative.
"The upgrades reflect the easing of financial stress following a
successful recapitalization, and expectation of improved operating
performance over the next 12-18 months as the business recovers,"
said Standard & Poor's credit analyst Dan Disenso.
On May 28, 2004, Motor Coach closed on a new 4.5-year $507 million
senior secured credit facility that replaced a credit facility
expiring in June 2005. The new facility contains a $205 million
first-lien revolving credit facility with borrowings limited by a
borrowing base. Thus, liquidity, while still tight, is improved,
as borrowings are tied to working capital needs as the business
grows or contracts, unlike the previous revolving facility that
was a cash flow-based facility with covenants that Motor Coach had
violated because of the depressed state of the business. The new
facility has no debt amortization before maturity, reducing debt
service requirements until markets recover.
The timing of the market recovery is critical in the turnaround of
Motor Coach's business.
"Ratings could be lowered should recovery be delayed thereby
preventing the firm from strengthening credit measures to
acceptable levels," said Mr. DiSenso.
NATIONAL CENTURY: NPF X Sues NCRC & TRC to Collect $6M Payment
--------------------------------------------------------------
According to Paul Harner, Esq., at Jones Day Reavis & Pogue, in
Chicago, Illinois, on May 30, 2002, National Corrections and
Rehabilitation Corporation and TR Correctional Medicine, Inc.,
each signed a Promissory Note in the principal sum of $6,000,000
made payable to PhyAmerica Governmental Services Management
Group, Inc. Pursuant to the Note, NCRC and TRC agreed to pay
PhyAmerica Governmental or its assignee the principal sum of
$6,000,000. Payments were due monthly, beginning May 23, 2002, at
an interest rate equal to the Prime Rate plus 3.25% per annum.
The Note provides that:
"[i]t is the intention of [NCRC and TRC] and [PhyAmerica
Governmental] that this Note shall be assigned to an affiliate
of [NPF VI] and [NCRC and TRC] hereby consent to such
assignment and any further assignment of the Note by that
affiliate of [NPF Vl]."
Pursuant to the consent, the Note was assigned to Debtor NPF X,
Inc., by PhyAmerica Governmental on May 30, 2002. NPF X entered
into the Assignment, which also reduced the amount owed to NCFE
by PhyAmerica Governmental in an amount equal to the principal of
the Note. Mr. Harner reports that neither NCRC nor TRC has made
any payments to NPF X on the Note. The parties also executed
other agreements on May 30, 2002, including a Stock Purchase
Agreement entered into by PhyAmerica Governmental, NCRC, TRC and
certain other entities where the stock of PhyAmerica Correctional
Healthcare, Inc., was transferred to NCRC and TRC.
The Note provides that:
(a) failure "to pay any Principal Sum of this Note . . . or
any interest on this Note within five days (5) after any
such amount becomes due" constitutes an Event of Default;
and
(b) "[u]pon the occurrence of an Event of Default, Lender may
elect, in the sole exercise of its discretion, to impose
the Default Interest Rate by giving written notice of such
election to [NCRC and TRC']." The Default Interest Rate
is the Prime Rate plus 5.25% per annum.
In late February or early March 2003, Jay W. Putt, NCFE Senior
Auditor, William Wachs, American Express Tax and Business
Services Inc., the Debtors' collection services consultants, and
Joseph F. Johnson, Jr., Chief Executive Officer of PhyAmerica
Correctional and President of NCRC, engaged in discussions
concerning the Debtors' Chapter 11 cases and the failure of NCRC
and TRC to make any payments on the Note.
In a letter dated August 21, 2003, the Debtors' counsel advised
Messrs. Johnson and Erich Mounce, TRC Executive Vice-President,
that because no payments were received on the Note, NCRC and TRC
were in default and that pursuant to the applicable provisions of
the Note, NPF X had elected to cause payment of the Note to be
accelerated and to impose the Default Interest Rate.
Accordingly, acting on NPF X's behalf, the Debtors' counsel
demanded payment from NCRC and TRC of the $6,000,000 principal
sum, plus interest at the Default Interest rate. Nether Mr.
Johnson nor any other NCRC representative has made any response
to the correspondence.
In a letter dated August 28, 2003, Mr. Mounce acknowledged
receipt of the August 21 letter from the Debtors' counsel and
enclosed a copy of a document entitled "October 31, 2002 Stock
Transfer Agreement," which purportedly transferred to NCRC all
the shares of PhyAmerica Correctional. In a letter dated
September 9, 2003, the Debtors' counsel reminded Mr. Mounce that
the Note had been entered into by NCRC and TRC and not PhyAmerica
Correctional, and that NCRC and TRC were in default on the Note.
Mr. Johnson was also sent a copy of the letter. In an October 2,
2003 letter to the Debtors' counsel, Mr. Mounce stated that TRC
had been "dissolved as a Delaware corporation on January 7, 2003"
and "has no resources with which to satisfy any obligations
alleged or asserted under the May 30, 2002 Promissory Note." Mr.
Mounce made no statement in that letter regarding the financial
wherewithal of NCRC.
Turnover
NPF X has placed NCRC and TRC on notice that because no payments
have been received on the Note, NCRC and TRC are in default and
that NPF X has elected to cause payment of the Note to he
accelerated and to impose the Default Interest Rate. The debt
owed by NCRC and TRC is thus matured and payable on demand.
Moreover, NPF X, through its counsel, has made repeated requests
to NCRC and TRC to pay the amounts due and owed under the Note.
Pursuant to Section 542(b) of the Bankruptcy Code, NPF X is
entitled to immediately recover from NCRC and TRC $6,000,000 plus
interest at the rate of the applicable Prime Rate plus 5.25% per
annum until the unpaid balance has been paid in full.
Mr. Harner asserts that NCRC and TRC must turn over and pay the
debt they owe to NPF X.
Willful Violation of the Automatic Stay
Because NCRC and TRC have actual knowledge of the commencement of
the Debtors' bankruptcy case, their refusal to pay the debt they
owe NPF X constitutes a willful violation of the automatic stay
under Section 362(a)(3) of the Bankruptcy Code, entitling NPF X
to a finding of civil contempt against NCRC and TRC, or in the
alternative, to damages.
Breach of Contract
The Note and the Assignment constitute a binding contract between
NCRC, TRC and NPF X. NPF X has suffered and continues to suffer
injuries as a result of the breach of the contractual provisions
of the Note by NCRC and TRC.
Accordingly, NPF X asks the Court to:
(a) compel NCRC and TRC to pay them an amount equal to
$6,000,000 plus interest at the rate of the applicable
Prime Rate plus 5.25% per annum until the unpaid balance
has been paid in full; and
(b) find NCRC and TRC in civil contempt, enter judgment
against NCRC and TRC for NPF X's damages, and order the
payment to NPF X of attorneys' fees and costs.
Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader
in healthcare finance focused on providing medical accounts
receivable financing to middle market healthcare providers. The
Company filed for Chapter 11 protection on November 18, 2002
(Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones,
Day, Reavis & Pogue represents the Debtors in their restructuring
efforts. (National Century Bankruptcy News, Issue No. 41;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NRG ENERGY: Inks Stipulation Resolving Three ABN AMRO Bank Claims
-----------------------------------------------------------------
In July 2003, ABN AMRO Bank, N.V., timely and properly filed
three proofs of claim:
* Claim No. 164 against NRG Finance Co. I, LLC, for $884,991,
evidencing a secured claim arising from obligations under
that certain Swap Agreement, dated as of December 4, 2001,
entered into between NRG FinCo and ABN;
* Claim No. 165 against NRG Capital, LLC, for $884,991,
evidencing a secured claim, based on obligations of NRG
Capital arising under that certain Pledge Agreement, dated
as of May 8, 2001, under which NRG Capital guaranteed the
NRG FinCo obligations arising under the FinCo Claim; and
* Claim No. 193 against NRG Energy, Inc., for $1,032,943,836,
evidencing principal and interest due to each of the banks
under that certain 364-Day Revolving Credit Agreement dated
as of March 8, 2002.
The Debtors raised certain objections to the ABN Claims. ABN's
counsel has provided the Debtors' counsel with documentary
evidence of the existence, validity and proof of the ABN Claims.
Subsequently, with the Court's consent, the parties stipulate
that:
(a) The Finco Claim and the NRG Capital Claim is allowed and
treated for all purposes as a Class 3 claim under the Plan
and, to the extent of any deficiency under the Class 3
claim, is allowed and treated for all purposes as a Class
7 claim;
(b) To the extent that ABN is oversecured with respect to the
Finco Claim, ABN will provide an accounting of its excess
security interest with respect to the Finco Claim and
promptly return any and all amounts in excess of ABN's
security interest with respect to the Finco Claim to the
Debtors;
(c) The Revolver Claim will be treated pursuant to the Plan;
and
(d) The Debtors will withdraw their Omnibus Objection with
respect to the Finco Claim, the NRG Capital Claim and the
Revolver Claim.
NRG Energy, Inc. owns and operates a diverse portfolio of power-
generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities.
The company, along with its affiliates, filed for chapter 11
protection (Bankr. S.D.N.Y. Case No. 03-13024) on May 14, 2003.
Debtors' counsel are James H.M. Sprayregen, P.C., Matthew A.
Cantor, Esq., and Robbin L. Itkin, Esq. of Kirkland & Ellis.
When the company filed for protection from its creditors, it
listed total assets of $10,310,000,000 and total liabilities of
$9,229,000,000. (NRG Energy Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
PEGASUS SATELLITE: Has Until August 16 to File Schedules
--------------------------------------------------------
The Pegasus Satellite Communications, Inc. Debtors' voluntary
chapter 11 petitions were accompanied by a consolidated list of
creditors and lists that include the Debtors' 50 largest unsecured
creditors on a consolidated basis. The schedules of assets and
liabilities, statements of financial affairs, lists of equity
security holders and lists of executory contracts and leases
required by Rule 1007(b) of the Federal Rules of Bankruptcy
Procedure were not filed with the Debtors' chapter 11 petitions.
Due to the sheer size and complexity of the Debtors' businesses,
the diversity of their operations and assets, and the limited
staffing available to gather, process and complete the Schedules,
the Debtors do not believe that the 15-day automatic extension of
time to file the Schedules provided for by Bankruptcy Rule
1007(c) will be sufficient to permit completion of the Schedules.
The Debtors require additional time to bring their books and
records up to date and to collect the data needed for the
preparation and filing of the Schedules.
The Debtors estimate that an extension of 60 additional days
pursuant to Bankruptcy Rule 1007(c) will provide the Debtors with
sufficient time to prepare and file the Schedules.
At the Debtors' request, Judge Haines extends the Debtors'
deadline to file their Schedules of Assets and Liabilities,
Statements of Financial Affairs, lists of equity security holders
and lists of executory contracts and leases to August 16, 2004.
Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite (DBS)
television. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Lead Case No. 04-20889) on
June 2, 2004. Leonard M. Gulino, Esq., and Robert J. Keach, Esq.,
at Bernstein, Shur, Sawyer & Nelson, represent the Debtors in
their restructuring efforts. When the Debtors filed for protection
from their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PG&E NATIONAL: NEG Debtors Move to Reconcile Intercompany Claims
----------------------------------------------------------------
National Energy & Gas Transmission, Inc., and its direct and
indirect subsidiaries, including USGen New England, Inc.,
comprise, in the aggregate, over 190 distinct entities. Before
the Bankruptcy Petition Date, these entities had routinely
transacted with one or more of the NEG Debtors, and the NEG
Debtors had transacted among and between themselves, in the
ordinary course of their operations and financial accounting.
These transactions included, among others:
* allocation of overhead;
* reimbursement of employment expenses;
* reimbursement of expenses directly incurred by one entity
on behalf of an affiliate;
* intercompany loans; and
* cash transfers made pursuant to standard cash management
procedures.
According to Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, LLP, in Baltimore, Maryland, the Debtors have worked
assiduously in recent months to reconcile intercompany balances
and, subject to certain exceptions, have successfully done so.
Consequently, the Debtors entered into omnibus intercompany
claims reconciliation and settlements to avoid substantial
administrative expenses and delay that would result from
reconciling intercompany claims in an adversarial context, rather
than through a settlement. The Intercompany Claims Settlements
will also enhance the certainty of recovery by the Debtors'
creditors and reduce the level of disputed claims reserves that
would be required to be established in the absence of the
settlements, both under NEG's reorganization plan as well as
under the other Chapter 11 plans that the other Debtors hope to
file in the coming months.
Proposed Intercompany Claims Settlements
The Debtors as well as NEG's non-Debtor subsidiaries -- the
Controlled Subsidiaries -- have a number of intercompany claims
running between and among them, which in the aggregate total
hundreds of millions of dollars. All of these claims are
recorded on each of the Debtors and the Controlled Subsidiaries'
books and records, which books and records are maintained
separately by each entity. To efficiently and effectively
resolve all prepetition obligations running by and between each
of the Debtors, and by and between each of the Debtors and each
of the Controlled Subsidiaries, the Debtors and the Controlled
Subsidiaries have reconciled their books and records, and based
on the reconciliation, have agreed to certain settlements.
Consolidated National Energy & Gas Transmission
Summary of Prepetition Intercompany Claims
By Affiliated Debtor
{Dollars in Thousands}
ET ET
Holdings ET Gas Investments
Debtors NEGT, Inc. Corp. Corp. Corp.
------- ---------- -------- ------- -----------
NEGT, Inc. - - ($38,780) -
Energy Trading -
Holdings Corp. - - 326,116 $43,527
Gas Corp. $38,780 ($326,116) - -
Investments Corp. - (43,527) - -
Power, LP 34,781 141,531 (26,562) -
USGen New England - (544) (161) -
Quantum Ventures 0 - - -
Energy Services 11,440 - - -
Ventures
Controlled
Subsidiaries
------------
NEGT Hold Co.'s 393,959 120 - -
Gas Transmission - (2) - -
Properties 0 - - -
ET - Other - 0 - -
IPP's (1,269) 3,035 (623) -
Merchants -
Continuing 288,502 105 44 -
Conveyed 17,624 - - -
Overseas 6 - - -
---------- -------- ------- -----------
$783,822 ($225,398) $260,035 $43,527
========== ======== ======= ===========
Consolidated National Energy & Gas Transmission
Summary of Prepetition Intercompany Claims
By Affiliated Debtor
{Dollars in Thousands}
Energy
ET Power, USGen New Quantum Services
Debtors LP England Ventures Ventures
------- --------- --------- -------- --------
NEGT, Inc. ($34,781) - ($0) ($11,440)
Energy Trading -
Holdings Corp. (141,531) $544 - -
Gas Corp. 26,562 161 - -
Investments Corp. - - - -
Power, LP - (105,188) - (261)
USGen New England 105,188 - - -
Quantum Ventures - - - -
Energy Services
Ventures 261 - - -
Controlled
Subsidiaries
------------
NEGT Hold Co.'s 59,698 - - -
Gas Transmission - - - -
Properties - - - -
ET - Other - (0) - -
IPP's - - - -
Merchants -
Continuing (10,427) - - -
Conveyed 17,894 - - -
Overseas - - - -
--------- --------- -------- --------
$22,862 ($104,483) ($0) ($11,702)
========= ========= ======== ========
Consolidated National Energy & Gas Transmission
Summary of Prepetition Intercompany Claims
By Affiliated Debtor
{Dollars in Thousands}
Debtors Total
------- ---------
NEGT, Inc. ($85,001)
Energy Trading
Holdings Corp. 228,655
Gas Corp. (260,614)
Investments Corp. (43,527)
Power, LP 44,302
USGen New England 104,483
Quantum Ventures 0
Energy Services
Ventures 11,701
Controlled
Subsidiaries
------------
NEGT Hold Co.'s 453,777
Gas Transmission (2)
Properties 0
ET - Other 0
IPP's 1,141
Merchants -
Continuing 278,223
Conveyed 35,518
Overseas 6
---------
$768,662
=========
The Intercompany Claims Settlements Chart excludes all
intercompany claims that are solely between and among the
Controlled Subsidiaries.
Because each of the Debtors and the Controlled Subsidiaries
maintain separate books and records, in certain instances, the
amounts recorded as owing to and from each company do not
reconcile, as it otherwise should. This variance is relatively
small. To avoid the substantial administrative expense and waste
of resources that would be required to reconcile the Variances,
if reconciliation were ever possible, the Intercompany Claims
Settlements deals with all variances by compromising them at 50%
of their stated value, effectively "splitting the difference"
between each claimant. The only exceptions are variances that
are in excess of $100,000, which will be resolved by the Debtors
seeking pre-authorization from the Court to settle any variance
so long as the settlement does not have the effect of:
-- decreasing the net claim of any of the Debtors against any
Controlled Subsidiary by more than 25%; or
-- increasing the net claim of any Controlled Subsidiary
against any of the Debtors with respect to the variances,
and would then proceed in good faith to accurately
reconcile each of the variances.
Excluded Claims
These claims are specifically excluded from the Intercompany
Claims Settlements:
(a) Any and all claims that any of the Debtors may have
against:
-- PG&E Corporation, including, without limitation, any
and all claims of NEGT arising in or related to
Adversary Proceeding No. 03-01249 (PM), styled as
"National Energy & Gas Transmission, Inc. v. PG&E
Corporation et al.," pending in the Bankruptcy Court;
and
-- Pacific Gas & Electric Company;
(b) Any and all claims -- including any rights related to a
portion of the proceeds -- that any of the Debtors may
have relating to or arising from prepetition tax
attributes used by PG&E Corp., which are now the subject
of the PG&E Litigation;
(c) Any and all claims, including related avoidance actions,
by and among one or more of the Debtors relating to
their rights and obligations under a tax sharing agreement
dated August 31, 1998 between National Energy Generating
Company, LLC, formerly known as USGen Energy Group, LLC,
and USGen New England;
(d) Any and all claims, including related avoidance actions,
of USGen to recover corporate dividends and distributions
paid by USGen before July 8, 2003;
(e) Any and all contingent and unliquidated tolling agreement
and other guarantee obligations of NEG that guaranteed an
obligation of one or more Controlled Subsidiaries;
(f) Excluding the Intercompany Claims Settlements, any action
pursuant to Sections 510, 544, 545, 547, 548, 550 or 553
of the Bankruptcy Code brought by or on behalf of any of
the Debtors against either:
-- any of the Debtors; or
-- any NEG subsidiary, affiliate or related company that
is specifically given notice under a reorganization
plan of one or more of the Debtors -- whether filed, in
the case of NEG, or anticipated to be filed, in the
case of the other Debtors -- that they might be subject
to the action;
(g) Any and all variances involving any of the Debtors that
cannot be consensually resolved within the parameters of
the Above $100,000 Variance Reconciliation;
(h) Any and all claims arising from or related to the
Court-approved stipulation by and among:
-- The Official Committee of Unsecured Creditors, the
Official Noteholders Committee, Citibank, N.A., as
administrative and security agent for the lenders, and
NEG, regarding the transfer of the Lake Road and La
Paloma generating facilities, treatment of the Lake
Road and La Paloma guarantee claims under the Plan, and
related Plan provisions; and
-- NEG, Societe Generale, as administrative agent of the
lenders, the Creditors Committee, and the Noteholders
Committee, regarding the transfer of the GenHoldings
Projects, treatment of the GenHolding guarantee claim
under the Plan, and related Plan provisions;
(i) Any and all claims of ET Power by or against Lake Road
and La Paloma;
(j) Any and all claims of NEG affiliates, subsidiaries or
related companies that were required to file proofs of
claim against one or more of the Debtors by the General
Bar Date;
(k) Any and all postpetition claims by or against the Debtors
that will be treated in the ordinary course of the
Debtors' businesses; and
(l) Any and all claims by any of the Controlled Subsidiaries
against any other Controlled Subsidiaries.
The Lake Road and La Paloma generating facilities, Mr. Fletcher
explains, are project-financed, gas-fired electric generating
plants indirectly, wholly owned by NEG through its non-debtor
subsidiaries. NEG guaranteed the full amount of the indebtedness
due to each of the Lake Road Project's and the La Paloma
Project's secured creditors, each subject to a defined cap. By
order dated March 15, 2004, the Court authorized NEG to cause its
applicable non-Debtor subsidiaries to transfer their interests in
the Lake Road and La Paloma Projects to the applicable lenders or
to their designees.
The Debtors will attempt to resolve each of the Excluded Claims
consensually as and to the extent required. To the extent that
any of the Excluded Claims cannot be resolved consensually, the
NEG Debtors will seek to have them resolved by the Court.
The Excluded Claims were, for the most part, not required to have
been asserted in the context of the General Bar Date because most
inter-affiliate claims were explicitly carved out of that Bar
Date. However, to facilitate the resolution of the Excluded
Claims, the Debtors believe that it would be appropriate for the
Court to establish a separate deadline for filing inter-affiliate
claims. The Affiliate Claims Bar Date would not serve to
retroactively extend the General Bar Date or otherwise affect the
timeliness or validity of any claim that was subject to the
General Bar Date.
Accordingly, the NEG Debtors ask the Court to:
(1) approve the Intercompany Claims Settlements, and authorize
the Debtors to enter into, consummate and effectuate the
Intercompany Claims Settlements, and take all necessary
actions to implement the settlements;
(2) treat each of the resolved Intercompany Claims against NEG
as Allowed Class 3 General Unsecured Claims under NEG's
Plan;
(3) establish June 8, 2004 as the deadline for filing proofs
of claim on account of the Excluded Claims, except for
postpetition claims; and
(4) preclude these parties from filing proofs of claim in
connection with the Affiliate Claims Bar Date against the
Debtors:
* Attala Power Corporation,
* Attala Generating Company, LLC,
* Attala Energy Company, LLC,
* Pacific Gas and Electric Company,
* PG&E Corporation,
* PG&E National Energy Group, LLC, and
* Pittsfield Generating Company, LP; and
(5) preclude these parties from filing proofs of claim in
connection with the Affiliate Claims Bar Date against
USGen:
* Pacific Gas and Electric Company,
* PG&E Corporation,
* PG&E National Energy Group, LLC, and
* Pittsfield Generating Company, LP.
Southaven Power Objects
Southaven Power, LLC, complains that partnership claims have not
been recognized or evaluated as intercompany liabilities of ET
Holdings. Until those claims can be properly asserted against ET
Holdings, no bar date should be set which might preclude
assertion of the Partnership Claims.
Southaven asserts a $500,000,000 claim against ET Power for
damages from the rejection of a tolling agreement that required
ET Power to purchase electricity. Southaven is a member of the
Official Committee of Unsecured Creditors for the ET Debtors.
Partnership Claims
Southaven contends that, contrary to the Debtors' representation,
ET Holdings is not the "direct parent" of ET Power. ET Holdings
is the sole general partner of ET Power and, therefore, is liable
to ET Power and its creditors under the general principles of
partnership law and pursuant to Sections 15-306 and 17-403 of the
Delaware Code.
Section 17-403 of the Delaware Code provides that "a general
partner of a limited partnership has the liabilities of a partner
in a partnership that is governed by the Delaware Uniform
Partnership Law." Additionally, Section 15-306 states that "all
partners are liable jointly and severally for all obligations of
the partnership."
Separate and apart from Delaware statutory liability, Southaven
notes that Partnership Claims may arise on other grounds once the
ET Committee can analyze the ET Debtors' affairs. The ET
Committee has retained Navigant Consulting, Inc., to investigate
intercompany transfers of cash, the implications of the
fragmented corporate structure of the ET Debtors, and whether or
not their separate corporate existence should be ignored for
reorganization plan purposes. Navigant may be able to advise the
Court and the ET Power creditors on the existence of Partnership
Claims once the investigation is complete.
Unlike other intercompany claims, Southaven observes that the
Partnership Claims were not included in the NEG Debtors' request
to settle intercompany claims. Moreover, even though the
Partnership Claims could dwarf all other claims against ET
Holdings and may represent the most valuable assets of ET Power,
the Partnership Claims do not appear in filed schedules showing
liabilities of ET Holdings or the asserts of ET Power.
Southaven complains that the Intercompany Claims Settlements are
not clear how the common management of ET Holdings and ET Power,
or their common counsel, could allege and prosecute the
Partnership Claims without facing an irreconcilable conflict. It
is also not clear how the ET Committee could avoid a similar
conflict in asserting the Partnership Claims.
ET Holdings has not filed a proposed plan and has not indicated
whether the Partnership Claims will be handled within the context
of a consensual ET Holdings plan. Moreover, no ET Power
creditors have yet organized to file a request to convert ET
Power to Chapter 7 in order that a trustee could pursue the
Partnership Claims if the ET Holdings plan fails to do so.
Southaven does not expect that the Partnership Claims can be
investigated and resolved either through a consensual ET Holdings
plan or through a conversion of ET Power to Chapter 7.
If the Partnership Claims are not asserted, Southaven fears that
the ET Power creditors would not receive an amount equivalent to
what they would receive under Chapter 7, which would violate the
best interest test under Section 1129(a)(7) of the Bankruptcy
Code. A Chapter 11 plan for ET Power that ignores the
Partnership Claims would be unconfirmable.
Southaven believes that the orderly administration of the ET
Power and ET Holdings cases would be furthered by the disclosure
of Partnership Claim issues to the affected creditors and the
allowance of adequate time to explore a consensual solution. The
conversion of the ET Power case, with the attendant
administrative costs, could be avoided if the intercompany
liabilities of ET Holdings are held open and the proposed
Affiliate Claims Bar Date does not apply to Partnership Claims.
Preserving the Partnership Claims, Southaven believes, will not
impact the efficient resolution of other prepetition intercompany
claims.
Letter of Credit Claims
Southaven also complains that the Debtors have not provided any
supporting details to support the settlement of these Letter of
Credit Claims:
(a) A $38,780,000 intercompany claim owed to National Energy
and Gas Transmission, Inc., by NEGT Energy Trading - Gas
Corporation; and
(b) a $34,781,000 intercompany claim owed to NEG by ET Power.
Both of the Letter of Credit Claims are reimbursement obligations
resulting from the draw of separate letters of credit provided
under the NEG letter of credit facility. Southaven asserts that
NEG never honored its reimbursement obligation to its lender and
the amounts listed as the Letter of Credit Claims were never paid
by NEG. To the extent NEG pays its liability pursuant to a
distribution under its Plan, that partial payment should be the
maximum allowable amount of the Letter of Credit Claims.
The ET Committee has requested Navigant to investigate the Letter
of Credit Claims and recommend what amount, if any, should be
properly allowed. In addition, the ET Committee has asked
Navigant to review the documentation for the Letter of Credit
Claims, and determine whether any liability should be treated as
a debt of ET Gas and ET Power or whether the reimbursement
obligation should be more properly characterized as a capital
contribution by NEG. Until the investigations can be completed,
it is premature to settle the Letter of Credit Claims.
Hold Co's Claims
The Debtors seek to establish a $59,698,000 claim owed to ET
Power by NEGT Hold Co's -- the Enterprise Note Claim. At the
same time, NEGT Hold Co's allegedly owe NEG $393,959,000. The
Debtors have not provided any details regarding which affiliates
owe the Hold Co's Claims, how they are to be paid, and in what
priority each of these claims are to be paid.
Southaven Power complains that it cannot determine which entities
owe the Hold Co's Claims and in what priority the claims will be
paid. The Debtors should clarify which entities owe the Hold
Co's Claims, how these debts will be paid, and which debt is
prior to the other. In the absence of a clarification, the ET
Committee has asked Navigant to investigate the Hold Co's claims.
Until the investigations can be completed, it is also premature
to settle the Hold Co's Claims.
Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- develops, builds, owns and operates
electric generating and natural gas pipeline facilities and
provides energy trading, marketing and risk-management services.
The Company filed for Chapter 11 protection on July 8, 2003
(Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq.,
Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at
Willkie Farr & Gallagher represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $7,613,000,000 in assets and
$9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue No.
23; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PRIDE INT'L: S&P Removes BB Corp. Debt Rating from Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Pride International Inc. to 'BB' from 'BB+' and removed
the rating from CreditWatch with negative implications.
Standard & Poor's also assigned its 'BB-' rating to the company's
proposed $400 million senior unsecured notes, which will be issued
under SEC Rule 144A.
Furthermore, Standard & Poor's assigned its 'BB+' senior secured
bank loan rating and a recovery rating of '1' to Pride Offshore
Inc.'s proposed $800 million senior secured bank credit
facilities, which consist of a five-year revolving credit facility
and a seven-year term loan B facility. Pride Offshore is a wholly
owned subsidiary of Pride International. The ratings will be
finalized upon receipt and review of final documentation.
The outlook is negative. Pro forma for the proposed
recapitalization plan, Houston, Texas-based Pride will have about
$2 billion in total debt outstanding, which is a debt burden that
is outsized relative to its peers.
"The negative outlook reflects the potential for a ratings
downgrade if the company either is unable to generate the cash
flow needed to complete the plan or elects to forego debt
reduction, or other strengthening of its financial profile, in
favor of growth initiatives," said Standard & Poor's credit
analyst Kimberly Stokes.
The ratings downgrade of Pride reflects Standard & Poor's opinion
that Pride's financial position was very weak for its former
rating and the concern that financial improvement could be
hindered by either additional losses and charges related to the
rig platform construction program, a slower-than-expected recovery
in the offshore drilling markets, or the company's aggressive
growth tendencies.
Pride has articulated a plan to reduce debt by $400 million by
year-end 2004, although even with that amount of debt reduction
the company's credit ratios appear consistent with the 'BB'
industrial medians.
QWEST COMMUNICATIONS: S&P Raises Corporate Credit Rating to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services raised the ratings of Denver,
Colorado-based diversified telecommunications carrier Qwest
Communications International Inc. and related entities. The
corporate credit rating was raised to 'BB-' from 'B-'. The outlook
is developing.
As part of the upgrade, Standard & Poor's has incorporated an
aggregate potential cash requirement related to the pending
shareholder lawsuits and/or Department of Justice and SEC
investigations, of not in excess of $2.0 billion-$2.5 billion.
This aggregate threshold includes a review of shareholder lawsuit
awards involving other companies in recent years. This does not
reflect Standard & Poor's assessment of the merits of the
government investigations and other lawsuits, nor does it
necessarily reflect Standard & Poor's expectations for the
resolution of these events. Rather, it reflects a maximum
tolerance factored into the 'BB-' rating. Current cash balances
roughly equal mandatory maturities through 2006. Accordingly, the
rating assumes that any settlement in the $2.0 billion-$2.5
billion range would be largely funded with additional debt, or the
sale of up to approximately 1 million access lines. Standard &
Poor's notes that under terms of the credit agreement, the
revolver is not available for legal settlements.
Other than all senior unsecured debt at the local exchange
telephone operating subsidiary, Qwest Corp., and the $750 million
revolving credit at Qwest Services Corp., which has a first lien
on the stock of Qwest Corp., all debt at Qwest and the various
entities, including senior unsecured debt at Qwest Capital Funding
Inc., second-lien debt at Qwest, and third-lien debt at QSC, are
rated two notches below the corporate credit rating. This notching
reflects the relatively significant concentration of priority
obligations to total asset value, assuming a $2,500 value per
access line. These primarily consist of debt at Qwest Corp., which
totaled about $7.8 billion. The $750 million revolving credit
facility at QSC, which is secured by a first lien on the stock of
Qwest Corp., is rated the same as the corporate credit rating due
to the fact that this bank loan is provided an 80%-100% estimated
recovery. Qwest Corp.'s unsecured debt is rated the same as the
corporate credit rating, as there are no material obligations
senior to this debt.
"The ratings reflect the relatively good overall business risk
profile of an increasingly challenged, but still well-positioned,
local exchange business," said Standard & Poor's credit analyst
Catherine Cosentino. "However, this is tempered by a lack of a
national wireless presence, in contrast to the other RBOCs, and a
fairly leveraged financial profile -- largely a legacy of cash
drain from the classic Qwest long-distance business."
RCN CORPORATION: Proposes Interim Compensation Procedures
---------------------------------------------------------
The RCN Corp. Debtors propose uniform procedures for compensating
and reimbursing Court-approved professionals on a monthly basis.
Jay M. Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom,
LLP, in New York, explains that the interim compensation
procedures are devised to closely monitor the costs of
administration, maintain a level cash flow, and implement
efficient cash management procedures.
Specifically, the Debtors propose that the interim payment of
compensation and reimbursement of expenses to the Chapter 11
Professionals be structured as:
(a) On or before the 20th day of each month following the
month for which compensation is sought, each professional
may serve a monthly statement on:
* the Debtors and their counsel;
* the counsel to all official committees;
* the Office of the U.S. Trustee; and
* the counsel for the Debtors' prepetition credit
facility.
The first Monthly Statement of any Chapter 11 Professional
should cover services rendered and expenses incurred from
the effective date of the professional's retention through
the end of the first full month after the Retention Date.
(b) The Monthly Statement would not be filed with the Court
and a courtesy copy would not be delivered to the
presiding Judge's chambers because the proposed procedures
would not be intended to alter the fee application
requirements outlined in Sections 330 and 331 of the
Bankruptcy Code, and the Chapter 11 Professionals would
remain obligated to serve and file interim and final
applications for approval of fees and expenses in
accordance with the relevant provisions of the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure, and the
Local Bankruptcy Rules.
(c) Each Monthly Statement would be required to contain a list
of the individuals and their titles who provided services
during the statement period, their billing rates, the
aggregate hours spent by each individual, a reasonably
detailed breakdown of the disbursements incurred, and
contemporaneously maintained time entries for each
individual in increments of tenths of an hour. No
professional should seek reimbursement of an expense that
would otherwise not be allowed pursuant to the Court's
Administrative Orders dated June 24, 1991 and April 21,
1995 or the U.S. Trustee Guidelines for Reviewing
Applications for Compensation and Reimbursement of
Expenses Filed under Section 330 of the Bankruptcy Code
dated January 30, 1996.
(d) Each Notice Party would have 15 days from receipt of a
Monthly Statement to review the Statement. In the event
that a Notice Party has an objection to the compensation
or reimbursement sought in a particular statement, the
Notice Party would serve, on or before the Objection
Deadline, a written "Notice Of Objection" setting forth
the nature of the objection and the amount of fees or
expenses at issue on the professional whose Monthly
Statement is the subject of the objection, and the other
Notice Parties.
(e) At the expiration of the Objection Deadline, the Debtors
would promptly pay 80% of the fees and 100% of the
expenses identified in each Monthly Statement to which no
Notice of Objection has been served.
(f) If the Debtors receive a Notice of Objection with respect
to a particular Monthly Statement, they would withhold
payment of that portion of the statement to which the
objection is directed and promptly pay the remainder of
the fees and disbursements in the disclosed percentages.
(g) Similarly, if the parties to an objection are able to
resolve their dispute following the service of a Notice of
Objection, and if the party whose statement was the
subject of an objection serves on all of the Notice
Parties a statement indicating that the objection is
withdrawn and describing in detail the terms of the
resolution, then the Debtors would promptly pay that
portion of the Monthly Statement, which is no longer
subject to an objection.
(h) All objections that are not resolved by the parties
would be preserved and presented to the Court at the next
interim or final fee application hearing to be heard by
the Court.
(i) The service of a Notice of Objection would not prejudice
the objecting party's right to object to any interim or
final fee application made to the Court in accordance with
the Bankruptcy Code on any ground, whether raised in the
objection or not. Furthermore, the decision by any party
not to object to a Monthly Statement would not be a waiver
of any kind or prejudice that party's right to object to
any fee application subsequently made to the Court in
accordance with the Bankruptcy Code.
(j) Approximately every 120 days, but no more than every 150
days, each Chapter 11 Professional will serve and file
with the Court an application for interim or final court
approval and allowance of the compensation and
reimbursement of expenses requested.
(k) Any Chapter 11 Professional who fails to file when due
an application seeking approval of compensation and
expenses previously paid under these procedures:
-- would be ineligible to receive further monthly payments
of fees or expenses as provided until all overdue
applications are filed; and
-- might be required to disgorge any fees paid since his
or her retention or the last fee application, whichever
is later.
(l) The pendency of an application or an order that payment of
compensation or reimbursement of expenses was improper as
to a particular Monthly Statement would not disqualify a
professional from the future payment of compensation or
reimbursement of expenses, unless otherwise ordered by the
Court.
(m) Neither the payment of, nor the failure to pay, in whole
or in part, monthly compensation and reimbursement as
provided would have any effect on the Court's interim or
final allowance of compensation and reimbursement of
expenses of any of the Chapter 11 Professionals.
(n) Counsel for any statutory committees appointed in the
Debtors' cases could, in accordance with the procedures,
collect and submit statements of expenses, with supporting
vouchers, from members of the committee, provided that
the reimbursement requests comply with the Court's
Administrative Orders dated June 24, 1991 and April 21,
1995.
The Debtors further ask the Court to limit the notice of hearings
to consider interim and final fee applications to the Master
Service List. Notwithstanding any orders providing for notice
procedures in the Debtors' cases, the actual interim and final
fee applications will be served only on the Notice Parties, with
a courtesy copy delivered to chambers. The notice should reach
the parties most active in the Debtors' cases and will save the
expense of undue copying and mailing charges.
Mr. Goffman relates that the proposed procedures would reduce the
administrative burdens imposed on the U.S. Trustee and the Court
by the fee approval process, and are consistent with the
procedures established in other complex cases.
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- is a provider of bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for protection
from their creditors, they listed $1,486,782,000 in assets and
$1,820,323,000 in liabilities. (RCN Corp. Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000)
RENT-A-CENTER: Plans Senior Debt Refinancing in Third Quarter
-------------------------------------------------------------
Rent-A-Center, Inc. (Nasdaq/NNM:RCII), the largest rent-to-own
operator in the country, announced that it anticipates refinancing
its current senior debt by entering into a new $600 million senior
credit facility, consisting of a $400 million term loan and a $200
million revolving credit facility. The Company anticipates
completing the transaction in the third quarter of 2004, and
intends to utilize the proceeds of the new senior debt to repay
its existing senior debt and for general corporate purposes.
"We believe the current credit market environment, coupled with
our enhanced credit standing evidenced by our recent credit
upgrade by Standard & Poor's, provides us with an opportunity to
lower our cost of capital and enhance our operational and
financial flexibility," commented Mr. Robert D. Davis, the
Company's Chief Financial Officer.
Rent-A-Center, Inc. headquartered in Plano, Texas, currently
operates 2,844 company-owned stores nationwide and in Canada and
Puerto Rico. The stores generally offer high-quality, durable
goods such as home electronics, appliances, computers, and
furniture and accessories to consumers under flexible rental
purchase arrangements that generally allow the customer to obtain
ownership of the merchandise at the conclusion of an agreed-upon
rental period. ColorTyme, Inc., a wholly owned subsidiary of the
Company, is a national franchiser of approximately 319 rent-to-own
stores, 307 of which operate under the trade name of "ColorTyme,"
and the remaining 12 of which operate under the "Rent-A-Center"
name.
* * *
As reported in the Troubled Company Reporter's May 27, 2004
edition, Standard & Poor's Ratings Services raised its ratings on
specialty rent-to-own retailer Rent-A-Center Inc. The corporate
credit rating was raised to 'BB+' from 'BB'. The outlook is
stable.
"The ratings reflect Rent-A-Center's leading market position in
the rent-to-own retail industry, moderate leverage, and adequate
liquidity," said Standard & Poor's credit analyst Robert
Lichtenstein. "These strengths are partially offset by the
company's participation in the highly competitive and fragmented
rent-to-own retail industry, and challenges in continuing its
growth in the face of slowing same-store sales."
ROYAL OLYMPIC: Unable to Beat Form 20-F Filing Deadline
-------------------------------------------------------
Royal Olympic Cruise Lines (Nasdaq: ROCLF) announced that it would
miss the filing deadline for its Annual Report on Form 20-F for
the fiscal year ended November 30, 2003. The company had
previously filed for a 15 day extension of the original filing
date of June 1.
The extension request and current delay are brought about due to
the more complicated accounting and finance position stemming from
the ongoing Article 45 process in Greece involving the Company's
subsidiaries.
As previously announced, the Company had applied for listing on
the Nasdaq SmallCap market after failing to meet the criteria for
continued listing on the Nasdaq National Market. Delisting from
the Nasdaq National Market had been delayed during the pendency of
the Company's application to the Small Cap Market. It is expected
that Nasdaq will now reinstitute delisting procedures due to the
Company's failure to file its 20F on time.
The Company is currently operating two cruise ships. However its
financial position remains fragile. Without resolution of
refinancing discussions there can be no guarantee of continued
operations.
The Company continues to discuss its options with its bankers and
creditors within the Greek court Article 45 process.
SK GLOBAL AMERICA: Rejecting 1385 Broadway Office Lease
-------------------------------------------------------
Pursuant to Section 365(a) of the Bankruptcy Code, SK Global
America Inc. seeks the Court's authority to reject a lease for
real property dated as of November 1994 by and between its
predecessor-in-interest, Sunkyong America, Inc., and Helmsley-
Spear, Inc., for office space located at 1385 Broadway, in New
York.
The Debtor believes that the Office is no longer integral to its
business operations and closing the Office before the expiration
of the term on the Lease would be prudent and in the best
interests of its estate.
Scott E. Ratner, Esq., at Togut, Segal & Segal, LLP, in New York,
maintains that the Lease is financially burdensome to the Debtor.
There is no conceivable benefit to the Debtor's estate in
continuing to pay rent for empty space. The Debtor has reviewed
and analyzed the Lease to determine its economic value and has
determined that there is no further benefit in retaining it.
The Lease expires on October 31, 2004. The Debtor has the option
to extend the term of the Lease for five years at 90% of the
prevailing market rent. However, the current monthly rent
payable under the Lease is $21,000 per month -- an amount the
Debtor believes is above the current market rates for similar
space.
The Debtor has been unable to assign or sublease the premises and
it is unlikely that an assignment or sublease of the Lease would
generate any value for the Debtor's estate. The potential
assignment value of the Lease, Mr. Ratner says, does not warrant
the Debtor's continued attempts to market the Lease in the hope
of assigning or sub-leasing it to a third party.
Eliminating the ongoing administrative expense payment obligation
by rejection of the Lease will provide a tangible benefit to the
Debtor's estate. There is simply no business justification for
the Debtor to continue performing its obligations under the Lease
after June 4, 2004.
Accordingly, the Court should approve the rejection of the Lease
pursuant to Section 365(a) of the Bankruptcy Code.
If Helmsley-Spear has a claim against the Debtor arising from the
rejection of the Lease, the claim must be received within 45 days
from the date the Court approves the Lease rejection. Helmsley-
Spear's claim must be filed with the Clerk of the Court with a
copy served on:
Togut, Segal & Segal, LLP
One Penn Plaza, Suite 3335
New York, New York, 10119
Attn: Scott E. Ratner, Esq.
Failure to comply means the claim will be forever waived and
barred from being asserted against the Debtor and its estate.
Mr. Ratner clarifies that nothing is intended or should be
construed as an admission as to the enforceability of the Lease
or the validity of any claims asserted against the Debtor arising
from rejection of the Lease. The Debtor expressly reserves the
right to dispute any claims asserted by Helmsley-Spear. (SK Global
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
SPIEGEL: Agrees to Restructure Catalog Asset Purchase Agreement
---------------------------------------------------------------
Spiegel Catalog International Limited -- the proposed purchaser
of all assets of Spiegel Catalog, Inc., Spiegel Publishing Co.,
Spiegel Catalog Services, LLC, and Spiegel Group Teleservices-
Canada, Inc. -- informed the Debtors that its financing sources
insisted that the Catalog Purchase Agreement be restructured as a
stock purchase for the U.S. assets and a direct asset sale for
the Canadian assets.
Spiegel Catalog International determined that there was a
reasonable possibility that it could fail to close its
transaction with the Debtors. While the Debtors believe that the
failure to close would entitle them to certain rights and
remedies, they believe that their creditors and estates will be
in a far better position if the sales were consummated and the
full consideration received without contest or litigation.
Andrew V. Tenzer, Esq., at Shearman & Sterling, LLP, in New York,
tells the Court that Spiegel Catalog International entered into
negotiations with the Catalog Sellers, which negotiations are
designed to maximize the probability that the sale transaction
would be consummated. Accordingly, Spiegel Catalog International
and the Catalog Sellers have agreed to enter into a Catalog Stock
Purchase Agreement.
Mr. Tenzer relates that the composition of the Catalog Purchased
Assets and the Catalog Assumed Liabilities will remain the same
under the terms of both the Catalog Purchase Agreement and the
Catalog Stock Purchase Agreement. The amended agreement effects
a transfer of the same assets and liabilities as the previous
agreement to the same purchaser. The consideration paid will not
change under the Catalog Stock Purchase Agreement.
Mr. Tenzer explains that the primary difference in the proposed
new agreement would be that instead of selling assets directly to
Spiegel Catalog International:
(a) all of the Catalog Assets to be purchased and Catalog
Liabilities to be assumed would be sold, assigned and
transferred to Catalog Newco -- a newly formed, wholly
owned non-Debtor subsidiary of one of the Catalog Entities
-- in exchange for all of the issued and outstanding stock
of that subsidiary;
(b) all of the ownership interest in Catalog Newco will be
transferred to Spiegel, Inc.; and
(c) Spiegel would sell the Stock -- and, thereby, ownership of
Catalog Newco -- to Spiegel Catalog International. As a
result of the Catalog Stock Purchase Agreement, Spiegel
Catalog International will own 100% of the common stock of
the entity that will own 100% of both the Catalog
Purchased Assets and the Catalog Assumed Liabilities. In
addition, Spiegel Catalog International would guaranty all
of the Catalog Assumed Liabilities.
A full-text copy of the Catalog Stock Purchase Agreement is
available at no charge at:
http://bankrupt.com/misc/Catalog_Purchase_Agreement.pdf
Accordingly, the Debtors seek the Court's authority to enter into
the Catalog Stock Purchase Agreement. The Debtors also ask Judge
Blackshear for permission to enter into, perform under and take
all actions necessary to give effect to the Catalog Stock
Purchase Agreement with either Spiegel Catalog International or
any other bidder that is successful at the auction.
Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is a leading international general
merchandise and specialty retailer that offers apparel, home
furnishings and other merchandise through catalogs, e-commerce
sites and approximately 560 retail stores. The Company filed for
Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.
03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,
at Shearman & Sterling represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $1,737,474,862 in assets and
1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ST. STEPHENS PARNERSHIP: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Lead Debtor: St. Stephens Partnership
209 West 121st Street
New York, New York 10027
Bankruptcy Case No.: 04-14159
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
St. Stephens Community Development Inc. 04-14160
Chapter 11 Petition Date: June 16, 2004
Court: Southern District of New York (Manhattan)
Judge: Cornelius Blackshear
Debtors' Counsel: Gwenerva Darling Cherry, Esq.
Cherry & Marshburn LLP
305 Broadway, Suite 303
New York, NY 10007
Tel: 212-267-7007
Fax: 212-267-4445
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20-largest creditors.
STOLT-NIELSEN: Resolves Dispute with Senior Noteholders
-------------------------------------------------------
Stolt-Nielsen S.A. (Nasdaq: SNSA; Oslo Stock Exchange: SNI)
announced that the Company had resolved its dispute with its
senior noteholders regarding defaults asserted by the noteholders.
"We are pleased that the noteholders have agreed to waive their
claims of default and to modify some loan covenants to permit the
Company to make certain investments in joint ventures," said Niels
G. Stolt-Nielsen, Chief Executive Officer of SNSA. "In return, the
Company has agreed to provide the noteholders with certain
security, which can be released if the Company obtains an
investment grade rating on its senior notes and under certain
other circumstances. SNSA can now focus on its businesses and
capitalize on the improving parcel tanker market worldwide."
The Company expects to file its Annual Report on Form 20-F on June
16, 2004.
About Stolt-Nielsen S.A.
Stolt-Nielsen S.A. is one of the world's leading providers of
transportation services for bulk liquid chemicals, edible oils,
acids, and other specialty liquids. The Company, through its
parcel tanker, tank container, terminal, rail and barge services,
provides integrated transportation for its customers. Stolt Sea
Farm, wholly-owned by the Company, produces and markets high
quality Atlantic salmon, salmon trout, turbot, halibut, sturgeon,
caviar, bluefin tuna, and tilapia. The Company also owns 41.7
percent of Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange:
STO), which is a leading offshore contractor to the oil and gas
industry. Stolt Offshore specializes in providing technologically
sophisticated offshore and subsea engineering, flowline and
pipeline lay, construction, inspection, and maintenance services.
TANGO INC: Annual Stockholders Meeting Slated for July 29
---------------------------------------------------------
Tango Incorporated (OTCBB:TNGO), a leading screen printing company
for major brand name apparel labels, announced that an Annual
Meeting of Stockholders of Tango Incorporated, a Florida
corporation, will be held on July 29, 2004 at 7:30 a.m. at 18055 A
N.E. Rafael Street, Portland, Oregon 97230.
During the Annual meeting, the stockholders shall vote on whether
to reappoint the current Board of Directors of the Company. They
shall also vote upon a proposal to approve the recommendation of
the Board of Directors of the Company to increase the number of
shares outstanding and the attractiveness of the shares to certain
investors by engaging in a 3 for 1 forward stock split. Finally,
the stockholders shall also vote upon a proposal for the Company
to become a Business Development Corporation.
Only stockholders of record at the close of business on May 19,
2004 are entitled to notice of and to vote at the Special Meeting
or any adjournments of postponements thereof.
A list of stockholders entitled to vote at the Special meeting
will be available at 18055 A N.E. Rafael Street, Portland, Oregon
97230 for a period of ten days prior to the Annual Meeting for
examination by any stockholder. The list will also be available
for examination at the Annual Meeting.
The current Board includes Todd Violette and Sameer Hirji. The
Board believes the reappointment of the individuals to the Board
is in the best interests of the Company's stockholders.
Board Recommendation
The Board believes that the reappointment of Todd Violette is in
the best interests of the Company and the Company's shareholders.
As a result, the Board recommends that you approve the proposal at
the Meeting to reappoint Todd Violette to the Board of Directors.
The Board believes that the reappointment of Sameer Hirji is in
the best interests of the Company and the Company's shareholders.
As a result, the Board recommends that you approve the proposal at
the Meeting to reappoint Sameer Hirji to the Board of Directors.
The Board of Directors has recommended that the Company undertake
a 3 for 1 forward stock split, thereby increasing the number of
shares outstanding and the attractiveness of said shares to
certain investors. As a result, the Board recommends that you
approve the proposal at the Meeting to undertake a forward stock
split.
The Board of Directors has recommended that the Company undertake
the transaction of becoming a Business Development Corporation,
thereby allowing it to raise additional funding for its operations
and to develop a larger investor base. The Board believes that
becoming a Business Development Corporation is in the best
interests of the Company and the Company's shareholders. As a
result, the Board recommends that you approve the proposal at the
Meeting to become a Business Development Corporation.
About Tango
Tango Incorporated -- whose January 31, 2004 balance sheet
shows a stockholders' deficit of $1,053,342 -- is a leading
garment manufacturing and distribution company, with a goal of
becoming a dominant leader in the industry. Tango pursues
opportunities, both domestically and internationally. Tango
provides major branded apparel the ability to produce the highest
quality merchandise, while protecting the integrity of their
brand. Tango serves as a trusted ally, providing them with quality
production and on time delivery, with maximum efficiency and
reliability. Tango becomes a business partner by providing
economic solutions for development of their brand. Tango provides
a work environment that is rewarding to its employees and at the
same time having aggressive plan for growth. Tango is currently
producing for many major brands, including Nike, Nike Jordan and
Chaps Ralph Lauren. Go to http://www.tangopacific.com/for more
information.
TUCKAHOE: S&P Raises Ratings on 2001-CTL1 Certificates To BB-
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on Tuckahoe
Credit Lease Trust 2001-CTL1 credit lease-backed pass-through
certificates. The outlook remains developing.
The raised rating reflects the raising of the corporate credit
rating on Qwest Communications International Inc. to 'BB-' from
'B-'. The outlook on Qwest remains developing. The rating on the
credit lease-backed certificates is dependent on the rating
assigned to Qwest.
The credit lease-backed certificates are collateralized by a first
mortgage and assignment of lease encumbering a condominium
interest in a two-story industrial building in Yonkers, N.Y. The
entire property is leased to Qwest Communications Corp., a wholly
owned subsidiary of Qwest, on a triple net basis, with QCC
responsible for all operating and maintenance costs.
Rating Raised; Outlook Remains Developing
Tuckahoe Credit Lease Trust 2001-CTL1
Credit lease-backed pass-through certs series 2001-CTL1
Rating
To From
BB-/Developing B-/Developing
UNITED AIRLINES: Asks Court to Declare Payments Not Subject to Tax
------------------------------------------------------------------
The United Airlines Inc. Debtors want a declaratory judgment
stating that they will not be required to withhold and pay federal
income taxes and employment taxes on property distributions to
their unions, pursuant to a proposed plan of reorganization.
The Debtors agreed with the unions that their plan of
reorganization would provide for distributions of property to
union members. The Debtors want to ensure that these
distributions will not constitute withholdings for federal tax
purposes. James H.M. Sprayregen, Esq., at Kirkland & Ellis,
acknowledges that the distribution will be taxable income to the
recipients, however, published rulings by the Internal Revenue
Service are clear that such an event does not equate to a wage
payment requiring withholding. However, because the penalties
for failing to withhold are severe, the Debtors want to make sure
they are protected from potential tax risk.
The Debtors' distribution to union members is in exchange for
their agreement to modify the collective bargaining agreements.
After the Debtors make the payments to the unions, the union
leadership may allocate the property among its members however it
sees fit. Some property may be distributed to the estates of
persons who are deceased.
The penalties for failing to withhold are "so draconian," that
the Debtors cannot go forward with their plan of reorganization
without obtaining certainty on this issue. If there is a
misunderstanding, the Debtors could be liable for "hundreds of
millions of dollars" in taxes and penalties. The Debtors'
individual officers and directors could be personally liable for
these amounts if the Debtors were unable to satisfy the
obligations.
IRS Objects
On behalf of the United States of America, Department of the
Treasury, Internal Revenue Service, U.S. Attorney Patrick J.
Fitzgerald, explains that there is no actual "case or
controversy" within the meaning of Article III of the U.S.
Constitution. The claims of the union members have not been
allowed, and are not allowable under Section 502 of the
Bankruptcy Code. Since no Chapter 11 plan has been proposed or
confirmed, the identity of the taxpayer/employer is not known.
Moreover, this proceeding concerns future employment tax periods
and events that may not occur as anticipated, if at all.
According to Mr. Fitzgerald, the Court lacks jurisdiction under
28 U.S.C. Sections 1334 and 157 over the Debtors' request because
the matter is not related to the bankruptcy cases, as the outcome
has no effect on the estate being administered in bankruptcy. In
addition, a Chapter 11 plan does not bind the U.S. Government in
its sovereign capacity for post confirmation tax liabilities.
The thrust of the proceeding is clearly to obtain a declaratory
ruling that will restrain the IRS from making a future tax
assessment. In that regard, the proceeding was improperly
commenced as a contested matter when it should have been an
adversary proceeding.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. the Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the
Debtors in their restructuring efforts. When the Company filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
US UNWIRED: Closes $360 Million Senior Secured Debt Offering
------------------------------------------------------------
US Unwired Inc. (OTCBB:UNWR) stated that it closed its previously
announced offering of $360 million of senior secured notes,
consisting of $125 million aggregate principal amount of first
priority senior secured floating rate notes due 2010 and $235
million aggregate principal amount of 10% second priority senior
secured notes due 2012. In addition, US Unwired announced that it
paid in full and terminated its existing senior secured credit
facility and purchased $235.8 million face amount of its
outstanding 13 3/8% Senior Subordinated Discount Notes due 2009.
"We are extremely pleased with our recent financing activities. In
patiently waiting for market dynamics to converge with our
improving operating results, we solidified our balance sheet and
improved our overall financial flexibility," said Robert Piper, US
Unwired's Chief Executive Officer.
"In particular, we accomplished three critical objectives: First,
and most importantly, we de-levered while minimizing shareholder
dilution. Through a series of strategic debt-for-equity exchanges,
we eliminated $75 million face amount of senior subordinated
discount notes. Second, we lowered our overall cost of debt. Our
new capital structure optimizes the collateral in our balance
sheet for debt holders, reducing our all-in interest rate by
approximately 300 basis points. Finally, we positioned the
company's balance sheet for further improvement. We transformed
high investor demand for our new securities into $75 million cash
that will allow us to call our high-cost bonds beginning in
November 2004."
About US Unwired
US Unwired Inc., headquartered in Lake Charles, Lousiana, holds
direct or indirect ownership interests in five PCS affiliates of
Sprint: Louisiana Unwired, Texas Unwired, Georgia PCS, IWO
Holdings and Gulf Coast Wireless. Through Louisiana Unwired, Texas
Unwired, Georgia PCS and IWO Holdings, US Unwired is authorized to
build, operate and manage wireless mobility communications network
products and services under the Sprint brand name in 67 markets,
currently serving over 650,000 PCS customers. US Unwired's PCS
territory includes portions of Alabama, Arkansas, Florida,
Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, Texas,
Massachusetts, New Hampshire, New York, Pennsylvania, and Vermont.
For more information on US Unwired and its products and services,
visit the company's web site at http://www.usunwired.com/.US
Unwired is traded on the OTC Bulletin Board under the symbol
"UNWR".
* * *
As reported in the Troubled Company Reporter's June 4, 2004
edition, Standard & Poor's Ratings Services placed its 'CCC-'
corporate credit rating for US Unwired Inc. on CreditWatch with
positive implications.
The 'C' subordinated debt rating was also placed on CreditWatch
with positive implications.
This action is based on financial profile improvement that will
result following debt for equity exchanges effected pursuant to
Section 3(a)(9), together with a proposed refinancing to repay the
company's bank credit facility and purchase 13.375% senior
subordinated discount notes tendered in response to the company's
cash tender offer for all of the notes. The 3(a)(9) exchange
agreements will reduce discount note principal outstanding by $75
million face amount, or about $70 million in accreted value. The
CreditWatch placement also reflects recent operating improvement,
including better customer retention and cash flow growth. Upon
completion of the refinancing, Standard & Poor's will raise the
corporate credit rating to 'CCC+' with a positive outlook. The
rating on any remaining 13.375% subordinated debt (estimated at
$89 million) will be raised to 'CCC-' from 'C'.
At the same time, a 'CCC+' rating was assigned to US Unwired's
proposed $125 million first-priority senior secured floating rate
notes due 2010. The 'CCC+' rating will be the same as the
corporate credit rating, indicating the expectation of a
meaningful, but less than full, recovery of principal in the event
of a default or bankruptcy. A 'CCC-' rating was assigned to the
$160 million second-priority senior secured notes due 2012. The
second-priority notes are rated two notches below the corporate
credit rating because of a likelihood of negligible recovery of
principal in the event of a default or bankruptcy after first-
priority claims are served. The new issues are being offered under
Rule 144A with registration rights. Proceeds will be used to repay
all of the existing credit facility and about $229 million face
amount of the existing 13.375% senior subordinated discount notes.
The rating on the bank facility was not placed on CreditWatch and
will be withdrawn upon repayment.
The 'CC' corporate credit rating and 'C' senior unsecured debt
rating on IWO Holdings Inc., a wholly-owned subsidiary of US
Unwired, are affirmed. IWO is a Sprint PCS affiliate operating in
the Northeast. US Unwired expects to file IWO for bankruptcy
protection because of very weak liquidity that makes IWO unable to
pay the July 2004 interest payment on its senior notes. Under the
terms of the two new US Unwired issues, IWO is classified as an
unrestricted subsidiary, and US Unwired is limited in its
capacity to provide financial support to IWO.
VIVENDI UNIVERSAL: Increases Offer to Purchase High Yield Notes
---------------------------------------------------------------
Vivendi Universal (Paris Bourse: EX FP; NYSE: V) announced that,
due to the success of its pending tender offer, it has increased
the size of its offer to purchase its high yield notes from EUR 1
billion to a maximum of EUR 2.4 billion in aggregate cash
consideration of the 9.50% high yield notes denominated in euros
and the 9.25% high yield notes denominated in U.S. dollars issued
by Vivendi Universal on April 8, 2003 and the 6.25% high yield
notes denominated in euros and U.S. dollars issued on July 10,
2003.
The transaction, which is now possible after the NBC Universal
closing, demonstrates Vivendi Universal's continued commitment
toward the efficient use of funding sources and active debt
management. It is a further step in Vivendi Universal's financial
restructuring that substantially lowers the future cost of its
debt.
Additional details on the terms of the tender offer are contained
in a separate press release issued Wednesday. The offer to
purchase and material relating to the tender offer described in
this press release (as well as additional information about the
terms of the offer, and how to tender notes and conditions to the
offer) can be obtained by contacting the information agent (Global
Bondholder Services Corporation (Toll free: +1 (866) 470-4500; +44
(0)20-7864-9136; or (banks and brokers) +1 (212) 430-3774)); or
the dealer managers (Banc of America Securities LLC (Toll free: +1
(888) 292-7000; or +1 (212) 847-5834) and J.P. Morgan Securities
Inc. (Toll free: +1 (866) 834-4666; +44 (0)20-7742-7506; or +1
(212) 834-4802)).
About the Company
Vivendi Universal (S&P, BB Long-Term and B Short-Term Corporate
Credit Ratings, Positive) is among the world's leading media and
communication companies and is number one in Europe. Entertainment
(music, film, TV, parks and games) is its core business.
WEIRTON STEEL: Files Liquidation Plan & Disclosure Statement
------------------------------------------------------------
Weirton Steel Corporation delivered to the Court its Chapter 11
Plan of Liquidation and Disclosure Statement on June 7, 2004.
Weirton Steel anticipates that its plan will be confirmed on or
before September 7, 2004, and consummated on or before September
30, 2004.
Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh,
Pennsylvania, outlines the salient provisions of the Liquidation
Plan:
A. Implementation of the Plan
Weirton will:
(a) make Cash payments on the Effective Date; and
(b) execute and deliver other documents or instruments
required by the Plan on the Effective Date.
B. Distributions to Holders as of the Distribution Record Date
As of the close of business on the Distribution Record Date,
the Claims Register, the equity register and transfer and
other registers as maintained by the Debtor and its agents, as
applicable, will be closed and there will be no further
changes in the record holder of any Claim or Equity Interest.
The Debtor will have no obligation to recognize any transfer
of any Claim or Equity Interest occurring after the
Distribution Record Date. The Debtor will instead be
authorized and entitled to recognize and deal for all purposes
under the Plan with only those record holders stated on the
Claims Register and equity register and other registers as of
the close of business on the Distribution Record Date.
C. Retention of Authorized Agent and Consultants During Wind-down
Period
With the closing of the Sale Transaction, providing for the
sale of substantially wherein all assets of Weirton Steel and
its subsidiaries to International Steel Group, Inc., and ISG
Weirton, Inc., all of Weirton's officers resigned or were
terminated from employment with Weirton. Accordingly, the
Bankruptcy Court approved Weirton's engagement of several
former employees as authorized agent and consultants for the
purpose of winding down Weirton's affairs and overseeing the
filing and confirmation of the Plan. Robert Fletcher is
appointed as the authorized agent. The Consultants are
compensated on a daily basis.
In addition, each Consultant other than Mark Kaplan will be
entitled to receive a portion of the $400,000 Bonus Pool
created pursuant to the terms of the Settlement and Lock-up
Agreement with J.P. Morgan Trust Company, National
Association, and the holders of the Notes and Bonds. Other
than Robert Fletcher, Howard Snyder and Peter Rich, each
Consultant will receive from the Bonus Pool an amount equal
to 10% of the compensation that the Consultant was paid
during the course of his or her engagement. Each of Peter
Rich and Howard Snyder will receive 25% of the balance of the
Bonus Pool after payment of the 10% bonuses. Mr. Fletcher
will receive a bonus in an amount equal to the greater of
$100,000 or 50% of the balance in the Bonus Pool after
payment of the 10% Bonuses, to be paid first from the balance
of the Bonus Pool.
D. Closing of the Chapter 11 Case
If at any time the Authorized Agent determines that the
expense of administering the Debtor so as to make a final
distribution to Allowed Claims is likely to exceed the value
of the assets remaining in the estate, the Authorized Agent
will apply to the Bankruptcy Court for authority to:
(a) reserve any amounts necessary to close the Chapter 11
Case;
(b) donate any balance to a charitable organization exempt
from federal income tax under section 501(c)(3) of the
Tax Code that is unrelated to Weirton and any insider
of Weirton; and
(c) close the Chapter 11 Case in accordance with the
Bankruptcy Code and Bankruptcy Rules.
If the aims or purposes of any charities relate to benefiting
the residents of Weirton, West Virginia, then the Authorized
Agent will choose any recipients of any donations from among
the charities. Notice of the application will be given
electronically, to the extent practicable, to those parties
who have filed requests for notices and whose electronic
addresses remain current and operating.
E. Cancellation of Existing Securities and Agreements
On the Effective Date, the promissory notes, trust indentures,
share certificates, security agreements, deeds of trust,
collateral agency agreement and other instruments evidencing
or securing a Claim or Equity Interest will be deemed
cancelled without further act or action under any applicable
agreement or Law, and the obligations of the Debtor under the
agreements, instruments, trust indentures and certificates
governing or securing the Claims and Equity Interests, as the
case may be, will be discharged.
As of the Effective Date, all Notes, Bonds and all indentures,
agreements, security agreements, deeds of trust, collateral
agency agreements and all indentures, agreements, instruments
and other documents evidencing the Note and Bond Claims and
the rights of holders, including the Secured Indentures, will
be cancelled and deemed null and void and of no further force
and effect, and all obligations of any person, including J.P.
Morgan as the indenture trustee to the Notes and Bonds, under
the instruments and agreements will be fully satisfied and
released. The cancellation will not impair the rights and
duties under the Secured Indentures as among the indenture
trustees to the Notes, the Bonds and the beneficiaries of the
trusts created.
F. Executory Contracts and Unexpired Leases
On the Effective Date, all executory contracts and unexpired
leases to which the Debtor is a party will be deemed rejected
as of the Effective Date, except for an executory contract or
unexpired lease that:
(a) has been assumed or rejected pursuant to Final Order of
the Bankruptcy Court entered prior to the Effective
Date, or
(b) is the subject of a separate motion to assume or reject
filed under Section 365 of the Bankruptcy Code by the
Debtor prior to the Effective Date.
G. Debtor's Post-Confirmation Role; Dissolution
(a) Payments and Transfers
On the Effective Date, or as soon as is reasonably
practicable, the Debtor will make payments and
transfers to holders of Allowed Claims to claimants in
accordance with the Plan.
(b) Administration of Taxes
Weirton will be responsible for all their tax matters
until certificates of cancellation or dissolution have
been filed.
(c) Claims Administration and Prosecution and Plan
Distributions
The Debtor will continue to have the power and
authority to prosecute and resolve objections to
Disputed Administrative Expense Claims, Disputed
Priority Tax Claims, Disputed Other Secured Claims, and
Disputed Priority Non-Tax Claims. The Debtor will also
continue to have the power and authority to hold,
manage, and distribute Plan distributions to the
holders of Allowed Claims consistent with applicable
provisions of the Plan.
All Insurance Claims that arose prior to the Petition
Date will be deemed Allowed in the greater of:
(1) an amount equal to the amount of any remaining self
insured retention under the Insurance Policy
applicable to the Insurance Claim, divided by the
number of Insurance Claims to which the applicable
Insurance Policy and self-insured retention
applies; and
(2) $0.
The allowance of an Insurance Claim pursuant to this
provision will not be deemed an admission of liability
by Weirton, and therefore will not be conclusive as to
Weirton's liability in any proceeding by the holder of
an Insurance Claim against an Insurer.
(d) Dissolution
Within 30 days after its completion of the acts
required by the Plan, or as soon as practicable, the
Debtor will be deemed dissolved for all purposes
without the necessity for any other or further actions
to be taken by or on behalf of the Debtor; provided,
however, that the Debtor will file with the office of
the Secretary of State of Delaware a certificate of
cancellation or dissolution.
A copy of Weirton Steel's Plan of Liquidation is available at no
charge at:
http://bankrupt.com/misc/weirton_liquidationplan.pdf
A copy of Weirton Steel's Disclosure Statement on the Liquidation
Plan is available at no charge at:
http://bankrupt.com/misc/weirton_discstatement.pdf
(Weirton Bankruptcy News, Issue No. 28; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
WINDERMERE SCHOOL: Wants to Employ PCE as Financial Consultants
---------------------------------------------------------------
Windermere School Partners, LLLP, along with its debtor-affiliate,
asks the U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, to employ, PCE Investment Bankers, Inc. and PCE
Advisory Services, LLC as its financial consultants.
The Debtors tell the Court that PCE will:
a. review current and historical financial performance of the
Debtors;
b. recommend expense reduction measures to be implemented;
c. assist in the creation of weekly and monthly financial
budgets for the debtor going forward;
d. provide fiscal oversight of the Debtors' expenditures and
communicate directly with Bank of America Strategic
Solutions, Inc. representatives as necessary comparing
actual expenditures with budgeted expenditures;
e. oversee weekly and monthly comparison of actual
expenditures to budget;
f. formulate alternative plans to restructure the business,
including raising additional capital as well as the sale
or partial sale of the business;
g. evaluate and compare the alternative plans and recommend a
course of action for the Debtors;
h. assist in placement of debt or equity or other form of
capital transaction to implement a restructuring plan;
i. assist in contacting financing sources, evaluating
Transaction proposals, and negotiating and structuring the
financial terms of a Capital Transaction; and
j. assist in the sale or partial sale of the Debtors.
PCE will be compensated with:
(a) $10,000 retainer and $250 per hour for consulting
services; and
(b) cash Incentive Fee for Transaction Services, equal to:
5% for equity; plus
3% for subordinated debt; and
1% for senior debt.
Headquartered in Windermere, Florida, Windermere School Partners
L.L.L.P., filed for chapter 11 protection on March 31, 2004
(Bankr. M.D. Fla. Case No. 04-03610). Frank M. Wolff, Esq., at
Wolff Hill McFarlin & Herron PA represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed both estimated debts and assets of
over $10 million.
WORNICK CO: S&P Rates Corporate Credit & Senior Notes at B+
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to The Wornick Co. At the same time, Standard &
Poor's assigned its 'B+' rating to the firm's proposed $125
million senior secured notes due 2011, offered under Rule 144A
with registration rights. The outlook is stable.
"The ratings on Wornick reflect a modest revenue base, limited
diversity, and high leverage following a pending buyout by Veritas
Capital," said Standard & Poor's credit analyst Christopher
DeNicolo. "Those factors are offset somewhat by the company's
position as a leading supplier of field rations to the U.S.
military," Mr. DeNicolo continued. Wornick is to be acquired by
Veritas for a total consideration of $155 million, to be funded by
the proceeds from the $125 million of secured notes and
$37.5 million of equity from Veritas and management. The notes are
secured by essentially all of the assets of the company but share
the collateral with a small credit facility on a subordinated
basis. Initial leverage will be high with debt to capital above
75% and debt to EBITDA of around 5x. Credit ratios and revenues
have been normalized to exclude extraordinary production volumes
in 2003 due to the war in Iraq.
Cincinnati, Ohio-based Wornick specializes in the production,
packaging, and distribution of shelf-life, shelf-stable, and
frozen foods in flexible pouches and semi-rigid products, with
normalized sales of around $175 million. The firm's three main
lines of business are military rations, co-manufacturing for
leading food brands (15%), and Wornick's own branded products for
the retail and food service markets (2%). The company produces
both individual and group rations for the U.S. military. MREs
comprise around half of military revenues and Wornick has the
highest market share of the three approved suppliers over the past
10 years. In 2003, demand for MREs and other rations more than
doubled due to the war in Iraq, but orders are expected to return
to more normal levels in 2004. The high number and increasing
tenor of overseas troop deployment and the replenishment of war
reserves is likely to sustain demand for MREs in the intermediate
term.
A fairly steady base of military business and upside potential
from the commercial operations should enable the company to
maintain a credit profile consistent with current ratings.
* Otterberg & Angeles Named AEG Partners' New Directors in Chicago
------------------------------------------------------------------
AEG Partners, the premier strategic advisory firm to distressed
middle market companies, announced the appointments of Jon C.
Otterberg and Kevin Angeles to Senior Directors in the firms
Chicago office. Both seasoned industry professionals with more
than 20 combined years of financial and management experience,
their responsibilities will include financial restructuring,
crisis management and asset dispositions.
Mr. Otterberg joins AEG Partners from FTI Consulting, Inc. where
he served as director. During his 5 years at FTI, Mr. Otterberg
advised clients in multiple industries on restructuring
alternatives, arranged, structured and negotiated debt
refinancings, analyzed and drafted business plans, created complex
financial and valuation models and managed cash. While at FTI,
Mr. Otterberg played an integral role in the successful
restructurings of FINOVA Corp., WorldCom, Inc. and Federal Mogul.
Prior to FTI Consulting, Mr. Otterberg was an Assistant Vice
President at Dresdner Kleinwort Benson where he was responsible
for the origination and structuring of leveraged loans to large
Midwest companies.
We are delighted with the addition of Jon to our team in
Chicago,said Craig Dean, Principal and Managing Director of AEG
Partners. He has a proven track record with a superb ability to
work with a company through a crisis, negotiate with interested
parties, communicate resolutions and motivate personnel. His
expertise will help to strengthen our growing team, while
effectively serving the needs of our clients.
Mr. Angeles joined the firms Financial Advisory and Corporate
Restructuring Group as director in January 2003 and has advised
under performing companies in a variety of industries through
successful restructurings and recapitalizations that have created
significant value. Prior to joining AEG Partners, Mr. Angeles was
Director of Transactions, Mergers and Acquisitions for Homestore,
Inc., a leading media and technology provider to the real estate
industry. Previously, he was a manager in The Walt Disney
Companys Corporate Controllership Group, responsible for providing
accounting and financial guidance in structuring deals and
transactions. Mr. Angeles also served as a Corporate Audit Manager
for Arthur Andersen LLP, specializing in its Manufacturing, Retail
and Distribution Practice.
"Kevin's promotion recognizes his outstanding contribution to our
company," said Mr. Dean. "His forward thinking business skills
have become an invaluable ingredient and fit very well within our
overall business strategy."
AEG PartnersChicago office can be reached at (847) 681-1818. Jon
Otterberg and Kevin Angeles can be reached directly at
jotterberg@AEGPartners.com and
kangeles@AEGPartners.com.
About AEG Partners
AEG Partners is the premier strategic advisory firm to distressed
middle market companies. The firm provides reliable, independent,
senior-level counsel that quickly secures the support of key
decision makers. AEG combines seasoned operational expertise with
a strong results focus to accurately identify and implement the
recovery and re-capitalization strategies necessary to improve
performance and drive stakeholder value. The firm maintains
offices in New York and Chicago. For additional information, visit
http://www.aegpartners.com/
* Gardner Carton Adds New Partners to Financial Litigation Group
----------------------------------------------------------------
Gardner Carton & Douglas LLP announces partners Kenneth Hartmann,
formerly of Piper Rudnick LLP, and Timothy J. Carey, formerly with
Lovells, the world's sixth largest international law firm, will
join Gardner Carton's intellectual property and financial markets
litigation practices respectively. Both attorneys will be based in
Chicago. Partner, Brigitte T. Nuss Kocheny, and associate, David
W. Porteous, also of Lovells, will join the financial markets
litigation group as well.
This is the fourth in a series of announcements Gardner Carton has
made as the management committee's concerted effort to build upon
the Firm's core practices continues. In May, Gardner Carton added
five lawyers from health care and labor employment boutique,
Stickler & Nelson, and thirteen lawyers and three non-lawyer
consultants from the nationally-renowned health care transaction
practice of Akin Gump Strauss Hauer & Feld LLP. This month, the
Firm formalized the Washington D.C. office's government relations
group naming a new chairman, Bob Waters, formerly of Arent Fox
PLLC. Lobbyists R. Edwin Redfern, Ilisa M. Halpern, Christine K.
Williams and Jackie Eder-Van Hook accompanied Waters - increasing
Gardner Carton's D.C. presence from 30 attorneys and 4
paraprofessionals to 42 attorneys and 9 paraprofessionals and
substantially strengthening the office's government relations
practice.
"It's an exciting time at Gardner Carton and Douglas. The
additions of Ken Hartmann and Tim Carey and his team bring an
added dimension to our capabilities in intellectual property and
complex litigation," said Harold L. Kaplan, Chairman of the Firm.
"In fact, we have added a total of 31 lawyers and consultants to
our Firm since May 1, all of whom will enable us to provide an
even greater level of comprehensive service to our clients."
Ken Hartmann represents private equity and real estate investors
on a variety of complex commercial transactions. He also
represents business clients on information technology matters
including outsourcing, software licensing and software
implementation. In addition, Hartmann counsels clients on
information systems security related areas including compliance
with the HIPAA security standard and the Sarbanes-Oxley internal
controls requirements.
Gardner Carton's financial markets litigation section will further
expand and diversify with the addition of Tim Carey and associate,
David Porteous. Brigitte Nuss Kocheny officially joins the firm as
partner on July 1. Carey and his colleagues' practice concentrates
on the representation of U.S. and multinational financial
institutions in complex litigation and investigative and
enforcement proceedings relating to securities, futures and
options, and other derivatives. Carey has substantial experience
litigating and trying cases in various federal and state courts
throughout the country as well as in many different alternative
dispute resolution forums. The addition of Carey, Nuss Kocheny and
Porteous complements and strengthens previous additions to the
financial markets litigation group. In January, Christopher J.
Barber, Stephen O'Donnell and six colleagues from Piper Rudnick
also joined Gardner Carton's litigation group bringing breadth and
depth of experience in insurance and reinsurance and complex
litigation.
"While we've focused significant time and energy towards further
building our renowned Health Law Department in recent months, we
are strategically growing other core competencies as well," added
Kaplan. "Intellectual property, real estate, litigation, employee
benefits, labor and employment, and corporate restructuring are
all areas in which Gardner Carton has strengths. We'll continue to
reinforce those strengths so we can offer our clients a firm with
expertise, not just experience, in their industries."
* PwC Names Fred Hipwell as Office Managing Partner in Las Vegas
----------------------------------------------------------------
PricewaterhouseCoopers LLP announced the appointment of Fred
Hipwell as office managing partner responsible for spearheading
the expansion of the firm's National Gaming Practice headquartered
in Las Vegas. The practice provides audit, tax, internal audit
outsourcing, regulatory compliance, advisory and research and
analysis services to its gaming clients -- including Las Vegas
destination resorts, Native American casinos, gaming equipment
manufacturers, and other industry suppliers.
"We look forward to benefiting from Fred's 19 years of experience
and strong reputation in the gaming industry as he takes on the
role of overseeing PricewaterhouseCoopers' National Gaming
Practice in Las Vegas," said James O'Shaughnessy, US Leader of
PricewaterhouseCoopers' Entertainment & Media Assurance Practice.
"Fred's leadership, client skills and industry connections will
enable us to further position the practice in key target markets,
providing professional services to the gaming industry and
community."
Mr. Hipwell commented: "When our Las Vegas office opened its
doors 10 years ago, we quickly secured significant client audit
opportunities and became one of the leading service providers in
gaming. I look forward to building on this momentum as we
continue to strategically extend the practice's reach and services
throughout the gaming community."
Mr. Hipwell, who previously served as a partner in the Las Vegas
office, replaces Randy Vallen, a 22-year gaming industry and
PricewaterhouseCoopers veteran. Mr. Vallen, who served as Las
Vegas' first office managing partner and served in that role for
10 years, will soon assume a different highly visible leadership
role within the firm. A separate announcement regarding his new
position will be issued in the coming weeks.
Mr. Hipwell has 19 years experience with PricewaterhouseCoopers,
serving clients in many segments of the gaming industry, including
Las Vegas destination resorts, Native American casinos and gaming
equipment manufacturers. Additionally, he specializes in internal
financial control systems, and has assisted numerous organizations
in assessing risk and identifying and analyzing the controls
required to mitigate those risks. A graduate of the University of
California, Los Angeles, he is also a member of the American
Institute of CPAs and the California, Connecticut, Kansas,
Louisiana, Mississippi, Nevada, Oregon, and Washington Society of
CPAs.
PricewaterhouseCoopers' National Gaming Practice is integrated
into the firm's global Entertainment and Media (E&M) Practice, a
network of more than 3,000 practitioners providing audit, advisory
and tax services to help clients manage risk, maximize shareholder
value and support M&A activities. PricewaterhouseCoopers' global
E&M Practice addresses business challenges for its clients
including developing business strategies to leverage digital
technology; marketplace positioning in industries characterized by
consolidation and convergence; and identifying new sources of
financing. Known as an industry thought leader, the E&M Practice
publishes the annual Global Entertainment and Media Outlook and
other surveys and white papers highlighting current and future
trends in the industry.
PricewaterhouseCoopers' Las Vegas is located at 3800 Howard Hughes
Parkway, Suite 550, Las Vegas, Nevada 89109.
About PricewaterhouseCoopers
PricewaterhouseCoopers -- http://www.pwc.com/-- provides
industry-focused assurance, tax and advisory services for public
and private clients. More than 120,000 people in 139 countries
connect their thinking, experience and solutions to build public
trust and enhance value for clients and their stakeholders.
* BOOK REVIEW: THE FIRST JUNK BOND -- A Story of Corporate
Boom and Bust
----------------------------------------------------------
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 236 pages
List Price: $34.95
Order your personal copy today at
http://www.amazon.com/exec/obidos/ASIN/1587981203/internetbankrupt
Review by Gail Owens Hoelscher
Only one in ten failed businesses is equal to the task of
reorganizing itself and satisfying its prior debts in some
fashion. This engrossing book follows the extraordinary journey of
Texas International, Inc (known by its New York Stock Exchange
stock symbol, TEI), through its corporate growth and decline, debt
exchange offers, and corporate renaissance as Phoenix Resource
Companies, Inc. As Harlan Platt puts it, TEI "flourished for a
brief luminous moment but then crashed to earth and was consumed."
TEI's story features attention-grabbing characters, petroleum
exploration innovations, financial innovations, and lots of risk
taking.
The First Junk Bond was originally published in 1994 and received
solidly favorable reviews. The then-managing director of High
Yield Securities Research and Economics for Merrill Lynch said
that the book "is a richly detailed case study. Platt integrates
corporate history, industry fundamentals, financial analysis and
bankruptcy law on a scale that has rarely, if ever, been
attempted." A retired U.S. Bankruptcy Court judge noted, "(i)t
should appeal as supplementary reading to students in both
business schools and law schools. Even those who practice.in the
areas of business law, accounting and investments can obtain a
greater understanding and perspective of their professional
expertise."
"TEI's saga is noteworthy because of the company's resilience and
ingenuity in coping with the changing environment of the 1980s,
its execution of innovative corporate strategies that were widely
imitated and its extraordinary trading history," says the author.
TEI issued the first junk bond. In 1986 it achieved the largest
percentage gain on the NYSE, and in 1987 suffered the largest
percentage loss. It issued one of the first bonds secured by a
physical commodity and then later issued one of the first PIK
(payment in kind) bonds. It was one of the first vulture
investors, to be targeted by vulture investors later on. Its
president was involved in an insider trading scandal. It innovated
strip financing. It engaged in several workouts to sell off
operations and raise cash to reduce debt. It completed three
exchange offers that converted debt in to equity.
In 1977, TEI, primarily an oil production outfit, had had a
reprieve from bankruptcy through Michael Milken's first ever junk
bond. The fresh capital had allowed TEI to acquire a controlling
interest of Phoenix Resources Company, a part of King Resources
Company. TEI purchased creditors' claims against King that were
subsequently converted into stock under the terms of King's
reorganization plan. Only two years later, cash deficiencies
forced Phoenix to sell off its nonenergy businesses. Vulture
investors tried to buy up outstanding TEI stock. TEI sold off its
own nonenergy businesses, and focused on oil and gas exploration.
An enormous oil discovery in Egypt made the future look grand. The
value of TEI stock soared. Somehow, however, less than two years
later, TEI was in bankruptcy. What a ride!
All told, the book has 63 tables and 32 figures on all aspects of
TEI's rise, fall, and renaissance. Businesspeople will find
especially absorbing the details of how the company's bankruptcy
filing affected various stakeholders, the bankruptcy negotiation
process, and the alternative post-bankruptcy financial structures
that were considered. Those interested in the oil and gas industry
will find the book a primer on the subject, with an appendix
devoted to exploration and drilling, and another on oil and gas
accounting.
Harlan Platt is professor of Finance at Northeastern University.
He is president of 911RISK, Inc., which specializes in developing
analytical models to predict corporate distress.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Bernadette C. de Roda, Rizande B. Delos Santos, Paulo
Jose A. Solana, Jazel P. Laureno, Aileen M. Quijano and Peter A.
Chapman, Editors.
Copyright 2004. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***